Many dairy farms and other agricultural businesses used the PPP program this spring during the COVID-19 crisis. The program’s initial funding quickly ran out but was opened back up once Congress allocated more money to the Small Business Administration for loans.
For recipients of PPP loans, the period to apply for forgiveness is now open and recipients should be working with their financial institution to secure forgiveness. However, the legislation signed today relaxes some of the requirements.
Extending the covered period giving loan recipients up to 24 weeks to spend loan funds instead of the original eight-week period.
Reducing the requirement that 75 percent of the funds must be used on payroll down to 60 percent to be eligible for forgiveness.
Allowing recipients of PPP loan forgiveness to defer payroll taxes.
Extending the loan maturity period from two years to five years for portions of PPP loans that are not forgiven. (This only applies to loans disbursed going forward. However, lenders and borrowers may mutually agree to modify the maturity terms of an existing loan.)
These changes were widely supported in Congress. Lawmakers will continue to monitor for shortcomings of PPP as well as loan forgiveness. The DBA team will keep you up to date on any significant modifications.