Find out how dairy farmers, co-ops can still apply for PPP

NMPF, members of Congress work to ensure dairy farmers, cooperatives have equitable access to PPP

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.