Update May 4, 2020: SBA is now accepting COVID-19 Economic Injury Disaster Loan and Advance applications for agricultural small businesses on a limited basis. Click here to visit the application on the SBA website.
Loveland, CO – April 21, 2020 – Following weeks of lobbying the Small Business Administration (SBA) to consider the approval of Ag businesses to qualify for eligibility for Emergency Economic Injury Disaster Loan (EIDL), K·Coe Isom’s Government and Federal Affairs team announced today that the effort has paid off. Congress officially added language to the Senate bill directing the SBA to allow agricultural businesses to apply for EIDL:
- The proposed language under Division A— Small Business Programs, Section 101: Amendments to the Paycheck Protection Program, Economic Injury Disaster Loans, and Emergency Grants Allows agricultural enterprises as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b)) with not more than 500 employees to receive EIDL grants and loans.
- Economic Injury Disaster Loans under the CARES Act are intended to help stabilize businesses during these difficult economic times. In addition to the inclusion of Ag businesses, Congress has also authorized the EIDL Grants from $10 billion to $20 billion.
“This is a big win for ag businesses, and we are pleased that Congress is directing the Small Business Administration to allow agricultural businesses to apply for Economic Injury Disaster Loans,” says Brian Kuehl, Director of Government and Public Affairs for K·Coe Isom. “SBA was wrong to have excluded Ag in the first place. Farmers are hurting and need access to the $10,000 emergency grants and low interest loans under this program. We wrote to SBA three weeks ago asking that they change course and they refused. It’s good that Congress is stepping in to fix this problem.”
Background on Emergency EIDL Grants
The Coronavirus Aid, Relief, and Economic Security Act (CARES) signed on March 27, included funding for a wide range of programs designed to help respond to the economic downturn caused by the COVID-19 pandemic. Included in this 876-page bill is Section 1110 entitled “Emergency EIDL grants” for which Congress appropriated $10 billion (to be increased to $20 billion when this bill is signed). The Small Business Administration (SBA) administers the underlying EIDL program. SBA has been awarding eligible small businesses emergency grants of up to $10,000/business and loans of up to $15,000/business to offset demonstrated economic losses caused by the coronavirus pandemic.
The underlying Economic Injury Disaster Loan program, under the Small Business Act section, authorizes the Small Business Administration (SBA) to make EIDL loans to small businesses. The CARES Act states that, from January 31, 2020 to December 31, 2020 “in addition to small business concerns, private nonprofit organizations, and small agricultural cooperatives, an eligible entity shall be eligible for a loan made under the Small Business Act.”
The bill will move to the House next, and is expected to be signed by President Trump as early as Friday.