The biggest news of the week was Congress’ final passage of what people are calling CARES 2.0. The legislation, officially called the Paycheck Protection Program Increase Act of 2020, included funding for a variety of programs, but as the name implies, most was earmarked for the Paycheck Protection Program, which ran out of money a week ago.
The Paycheck Protection Program provides low-interest, forgivable loans for small businesses, including farms and ranches, who can use them to cover up to eight weeks of payroll costs. Anyone with 500 or fewer employees qualifies and 75% of the loan must be used for payroll, but the rest can be used for operational expenses.
Obviously, that only helps folks with a payroll, which leaves out many cattle producers. Still, we’ve seen plenty of ranchers and other ag producers take advantage of the program.
Our philosophy is to get as many tools out there as possible to help as wide a variety of producers as possible.
That’s where the Economic Injury Disaster Loan program is important. In addition to the Paycheck Protection Program replenishment, CARES 2.0 mandates that the Small Business Administration include ag producers in Economic Injury Disaster Loans. It’s broader and offers $10,000 advances for operational expenses that don’t have to be repaid. The same 500 or fewer employee requirement exists for eligibility.
More info on both programs is available at www.sba.gov.
At this moment, neither program is accepting applications since they are out of money, but once the CARES 2.0 funding comes online, they will be back open for applications on a first-come, first-serve basis. We expect that will happen quickly, so we will keep you posted in the daily update.
Also, USDA is still finalizing the rules for the Coronavirus Food Assistance Program. We expect that the program will come online soon as well and will provide additional information as soon as it’s available.
None of these programs are one size fits all but, having three more options in the toolbox is certainly a step in the right direction!
Until next time.
Jeremy Fuchs is the director of public affairs for Texas and Southwestern Cattle Raisers Association.