The Paycheck Protection Program (PPP) is a guaranteed loan program administered by the Small Business Administration (SBA) and offered by The Bank of Marion. Its purpose is to support small businesses and help them maintain their payroll during the coronavirus pandemic.
Self-employed farmers who apply for PPP loans will find newly expanded access to these loans, along with simplified qualification for loan application and loan forgiveness. When requirements are met and loan forgiveness applications are accepted, PPP loans can be forgiven.
Agricultural producers, farmers, and ranchers with 500 or fewer employees whose principal place of residence is in the United States are eligible. Farms are eligible if the farm has 500 or fewer employees, or it fits within the revenue-based size standard: average annual receipts of $1 million or less.
Additionally, a farm can qualify for PPP if it meets SBA’s alternative size standard. The alternative size standard is currently: (1) the maximum net worth of the business is not more than $15 million, and (2) an average net income of the business for the two full fiscal years before the date of the application of not more than $5 million.
Small agricultural cooperatives may receive PPP loans as long as other eligibility requirements are met. Other forms of cooperatives may be eligible provided they comply with all other loan programs.
The SBA requires sole proprietors, independent contractors, and other eligible self-employed individuals to provide documentation that the business was in operation as of February 15, 2020. This documentation may include payroll processor records, payroll tax filings, Form 1099-MISC, or income and expenses from a sole proprietorship.
For borrowers who do not have any such documentation, the borrower must provide other supporting documentation such as bank records, sufficient to demonstrate the qualifying payroll amount.
We will be happy to assist area farmers and ranchers with additional information and help with PPP loan applications and loan forgiveness applications. Just contact your Bank of Marion Loan Officer, the manager of any of our branches, or my office.
We will need your 2019 SCHEDULE F (Form 1040) Profit or Loss from Farming to get started on your loan.
We look forward to working with you to secure a PPP loan and subsequent loan forgiveness.
V.P. and Chief Lending Officer
The Bank of Marion
Some information for this document was provided by the U.S. Department of Agriculture.