As the pandemic shifts longstanding food supply chains, many agriculture businesses face difficulty shifting customer bases from restaurants and institutions to individual consumers. This has led to dairy farmers dumping thousands of gallons of milk and farmer plowing under their fields instead of paying to harvest produce that no one has contracted to buy.

Yet until now, many agricultural operations enjoyed little relief from the CARES Act. The Payroll Protection Program, which includes significant loan forgiveness for money spent on payroll-related costs, provided limited help to many growers and ranchers because their seasonal labor are independent contractors and/or foreign workers. Agricultural operations also could not qualify for the Economic Injury Disaster Loans (“EIDL”) from the Small Business Administration (“SBA”). 

But in this latest round of changes to the CARES Act, qualifying small agricultural operations can finally access EIDL loans up to $2 million. To be eligible agricultural operations must have suffered or be likely to suffer substantial economic injury as a result of the pandemic, must be an independently owned and operated business, must not have credit available elsewhere, and must be a small business (as defined in the Small Business Act (15 U.S.C. 647 (b)) with not more than 500 employees). The SBA will require an acceptable credit score and will review the applicant’s ability to repay the loan. Up to $2 million may be borrowed, depending on the size of the business, and the funds may be used for items such as fixed debts, payroll, and accounts payable. Certain grants of up to $10,000 also may be available and are determined based on the number of employees.

President Trump signed the bill expanding CARES Act funding today, Friday, April 24, 2020. Funds could be available as early as Monday for the SBA to begin processing applications again.