Special note: K·Coe Isom is working to convince SBA to open this program to agricultural businesses. We have joined forces with 30 agriculture organizations and sent a letter to the head of the SBA demanding that agriculture businesses be able to participate in this program. K·Coe Isom’s government affairs team is also working to get Congress engaged. Below is an update on EIDL funding status for ag businesses at this time.
Under the Small Business Act section of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Congress directed the Small Business Administration (SBA) to make Economic Injury Disaster Loans (EIDL) of up to $2 million to businesses with fewer than 500 employees. While the original EIDL funding program under the Small Business Act was closed to agricultural businesses, Congress placed no such limitation on this new emergency program.
Unfortunately, in spite of the clear direction from Congress, the Small Business Administration has interpreted the CARES Act as barring agricultural businesses from applying for these funds. K·Coe Isom is asking the SBA and Congress to work together to solve this problem so that agricultural businesses can access this important program.
Small Business Act Defines an Eligible Entity
After a close analysis of the CARES Act and related statutes, K·Coe Isom professionals have concluded that, yes, agricultural businesses should be eligible to file for emergency EIDL grants.
“We believe SBA is misinterpreting the CARES Act and that agricultural businesses with not more than 500 employees are eligible to apply for EIDL,” affirms Brian Kuehl, Director of Government and Public Affairs at K·Coe Isom.
Earlier this week, Senate Democrats proposed an amendment to the CARES Act that would clearly state that agricultural businesses are eligible for the EIDL loan program.
“We believe that this problem will get fixed and that agricultural businesses should begin preparing EIDL applications if they need this assistance,” added Kuehl. “It makes no sense to keep our nation’s farmers and ag businesses out of this program given how hard agriculture has been hit by the trade wars and now by the economic downturn.
For high-level guidance on EIDL eligibility and applicability, K·Coe breaks down both PPP and EIDL programs here: https://www.pinionglobal.com/cares-act-faqs-helpful-loan-guidance-for-businesses/
Should you need help evaluating tax and loan options for your business, or assistance with applications or reporting for the EIDL loans and PPP forgivable loans, contact a K·Coe advisor, or visit: https://www.pinionglobal.com/business-impact-diagnostic/.
April 21st Update: Just announced: Senate passes bill allowing small ag businesses to receive disaster loan relief.