Farms and Agricultural Businesses Now Eligible for Economic Injury Disaster Loans
The Small Business Administration (SBA) announced on Monday, May 4th that farms and agricultural businesses would now be eligible to apply for and receive Economic Injury Disaster Loans (EIDL). The EIDL program is designed to assist businesses affected by natural and economic disasters. Often used for events like hurricanes and earthquakes, the SBA has declared all 50 states, Washington, DC, and several territories are eligible to receive EIDL loans for businesses affected by the coronavirus pandemic.
The SBA had previously been prohibited from awarding loans to agricultural businesses, but the Paycheck Protection Program and Healthcare Enhancement Act, passed by Congress two weeks ago, authorized the use of SBA funds for these businesses. The EIDL awards loans of up to $150,000 to cover debt, payroll, and other expenses. The program recently awarded up to $2 million but reduced the maximum amount under budgetary pressure and a glut of applications. The loan can be repaid over as much as 30 years at a 3.75% interest rate (or 2.75% for not-for-profits). EIDL awardees are also eligible for a $10,000 advance to cover immediate expenses. The $10,000 advance is a grant and does not need to be repaid.
Agricultural businesses with 500 or fewer employees will be eligible to apply. The SBA stopped accepting EIDL applications on April 15, and it will now process those applications on a first-come, first-served basis. Non-agricultural businesses are no longer eligible for EIDL loans, although they are still eligible for other SBA loan programs, including the Paycheck Protection Program.
Agricultural businesses that have already applied for an EIDL loan do not need to reapply now. Those businesses can begin their loan applications here. For more information on SBA loan programs, see this previous O’Neill and Associates blog post.