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PPP Updated and Application Deadline Extended: The Latest on How Dairy Farmers and Co-ops Can Still Apply

March 29, 2021

Congress created the Paycheck Protection Program (PPP) in the CARES Act, its second coronavirus emergency relief package response enacted in March 2020. The program was designed to help small businesses keep their workers employed during the COVID-19 pandemic. PPP loans revolve around payroll costs, including employer-provided benefits. Business owners can also use a smaller percentage of each loan to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, and certain supplier costs and operational expenses. PPP loans are forgivable.

The Small Business Administration (SBA) administers the program, which agricultural businesses initially struggled to access. NMPF has worked with members of Congress to ensure dairy farmers and cooperatives have equitable access to PPP, and together have improved access for agriculture in multiple areas. Producers who were denied a PPP loan in 2020 may now qualify if the new rules address the issue that caused the initial denial of their loan. In addition, borrowers who received their loans before SBA issued later rules and guidance may have received a smaller loan then they would under the new rules. For that reason, borrowers who have not yet had their loan forgiven can now ask their lender to evaluate their initial loan application against the new rules so that additional loan funds may be provided to make up any difference.

Congress also has created a separate type of PPP loan with steeper qualification requirements for businesses that have received and spent their first PPP loan. Called “PPP second draw loans,” these separate, second loans can only be taken by businesses that experienced a 25% reduction in revenue in 2020 and already spent the entire amount of its first PPP Loan.

Interested borrowers can apply for either type of PPP loan or have their first loan reevaluated by their lender until May 31. See below and visit the Treasury Department’s PPP webpage for more information.

Frequently Asked Questions

What will be my PPP loan amount?

PPP loan amounts are calculated using different tax forms, depending on the type of business. Given the reliance on tax forms and lender decisions, potential borrowers are highly encouraged to consult with their accountant and/or their lender before completing their loan application.

You can determine your possible first PPP loan amount here. You can determine your possible second draw PPP loan amount here.

 

What are the loan forgiveness requirements?

Borrowers may be eligible for loan forgiveness if the funds were used according to program rules. Borrowers can apply for forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within the 10 months following the loan covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments. More information on loan forgiveness, including forgiveness application forms, can be found on the Treasury Department’s PPP website here.

 

How can I apply for assistance?

Borrowers apply for a PPP loan directly with eligible lenders, which includes any existing SBA 7(a) lender, federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating in the PPP program. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. Contact your local lender regarding its participation in PPP. For those needing a lender, SBA is connecting borrowers to lenders here.

To prepare your application, download the following PPP borrower application forms to see the information that will be requested from you when you apply with a lender:

 

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