Farmers and small businesses are benefiting from changes to the Paycheck Protection Program (PPP) signed into law Dec. 27 as part of the stimulus bill, or Consolidated Appropriations Act (CAA) of 2021.
Features include the New Farmer PPP Loan. Farm borrowers can calculate PPP loan amounts based on 2019 Schedule F gross receipts. The calculation is maxed at $100,000 of gross receipts.
This applies to farmers who did not receive PPP loans the first time and those who could receive larger loans thanks to the new provisions. If a 2020 loan was forgiven before Dec. 27, the farmer is not eligible to reapply for a larger amount.
Originally, farmers and businesses had to choose between PPP or Employee Retention Credit (ERC) loans. CAA 2021 allows retroactive participation in both.
Additional changes include:
- A simplified PPP forgiveness process for PPP loans less than $150,000
- Tax deductions available for covered business expenses (mortgage interest, employee salaries, rent, utilities, etc.) paid with PPP loans
- Economic Injury Disaster Loan (EIDL) advance grants are not taxable and do not reduce PPP loan forgiveness
PPP loan applications are available here until March 31, or until funds are depleted.
Farmers are encouraged to apply for loans through lenders including Farm Bureau Bank.