Ag Businesses Now Eligible for Economic Injury Disaster Loans and Grants

Ag Businesses Now Eligible for Economic Injury Disaster Loans and Grants

May 5, 2020

The SBA has announced that agricultural businesses are now eligible for the Economic Injury Disaster Loan (EIDL) and EIDL Forgivable Advance programs. The application portal for these programs was reopened on Monday, May 4 in response to funding authorized by the Paycheck Protection Program and Healthcare Enactment Act, which provides additional funding for farmers, ranchers, and certain other agricultural businesses affected by the COVID-19 pandemic.

At this time, only agricultural business applications will be accepted through the portal.

Economic Injury Disaster Loan (EIDL)

EIDLs are available for “affected businesses” to help them pay bills and other expenses during the period of time when their business is disrupted due to the pandemic. These loans may be used for fixed debts, payroll, accounts payable, and other bills that cannot be paid. The loans cannot, however, be used to refinance long-term debts. If you have received a Paycheck Protection Program (PPP) loan you may not use EIDL funds to pay the same expenses that were paid with the PPP.

  • Maximum Loan Amount: $2 million
  • Loan Term: Up to 30 years
  • Annual Interest Rates: 3.75% for businesses
  • EIDLs are accessed directly through the SBA
  • Eligible agricultural businesses may apply for the loan here 

EIDL Forgivable Advance

EIDL Forgivable Advances provide emergency funds of up to $10,000 to small businesses harmed by COVID-19. We have currently been seeing instances where the SBA provides $1,000 per employee. Or, for businesses with no employees, $1,000 for the business owner. We have not received clarification on whether the advances for agricultural businesses will be handled similarly.

The guidelines indicate a three-day turnaround for receipt of funds. However, our experience at HBE has been that it can take 2-3 weeks to receive the advance. To access the advance, you first apply for an EIDL and then request the advance through the EIDL application process. The funds may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent, and mortgage payments. The forgivable advance portion of the EIDL does not need to be repaid under any circumstance.

Additional information on SBA guidance relating to the EIDL and EIDL Forgivable Advance program is available here.

Next Steps

For agricultural businesses that previously submitted an EIDL application, there is no need to re-apply as the SBA will begin processing those applications on a first-come first-serve basis.

If you plan to apply for an EIDL, it is important that you begin gathering the required information for the loan application. We strongly encourage you to work with your advisors as you start this process. HBE has packets available with the list of the items you will need, as well as the necessary forms. We also have a team of professionals who have been designated to assist our clients through the SBA loan process.

At this time, we have not received guidance on how the EIDL and PPP loan programs will work in conjunction with the USDA relief program that is being developed. As additional information becomes available, we will share it with you.

For more resources and updates on coronavirus financial relief efforts for businesses, please click here.

This communication and any applicable contents pertaining to COVID-19 employer relief provisions is based on our professional judgment given the facts provided to us and the COVID-19 employer relief provisions guidance as of the date of the communication. Subsequent developments changing the facts provided to us, or differences in the final guidance and regulations once they are issued, may affect the advice provided. These effects may be material.