Wineries with existing debt will need the approval of their lenders to participate in the program, because most conventional loans for wineries include a covenant prohibiting a winery from applying for additional debt without the lender’s consent. Given the advantageous nature of the PPP loan structure, however, it seems likely that existing lenders would approve the winery’s participation in the program, since the PPP essentially provides additional cash flow at a time when it may be definitely needed.

What is unclear at this point is how complicated it will be to participate in the program. Although the application form is straightforward, it is not known how long it will take to process. Given the large numbers of applications expected to be received, and the fact that the CARES Act is a new law that has not yet been put to use, the implementation of the program is an unknown at this time. That being said, various sources examining the new law have speculated that funds could become available for participating businesses within a matter of days. Certainly, participation seems worthy of consideration.

Linked here is a more detailed summary of the program, along with a link to the application form. Because the program opens tomorrow morning for the filing of applications, we suggest that any interested wineries review the materials as soon as possible.