Ag/Farmer/Rancher PPP Eligibility
Farms are eligible if:
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Are agricultural producers, farmers, and ranchers eligible for the Small Business Administration’s Paycheck Protection Program (PPP)?
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Agricultural producers, farmers, and ranchers with 500 or fewer employees whose principal place of residence is in the United States are eligible.
Farms are eligible if: (i) the farm has 500 or less employees, OR (ii) it fits within the revenue-based sized standard, which is on average annual receipts of $1M.
Additionally, farms can qualify for PPP if it meets SBA’s “alternative size standard.” The “alternative size standard” is currently: (1) a maximum net worth of the business not more than $15 million, AND (2) the average net income Federal income taxes of the business for the two full fiscal years before the date of the application be not more than $5 million.
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Are agricultural and other forms of cooperatives eligible for PPP?
- As long as other eligibility requirements are met, small agricultural cooperatives may receive PPP loans. Other forms of cooperatives may be eligible provided they comply with all other Loan Program Requirements
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How do sole proprietor farmers provide accurate documentation regarding payroll, when they may not take a traditional salary?
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SBA requires sole proprietors, independent contractors, and other eligible self-employed individuals to provide documentation to its lender that the business was in operation as of February 15, 2020. This documentation may include payroll processor records, payroll tax filings, or Form 1099-MISC, or income and expenses from a sole proprietorship. For borrowers that do not have any such documentation, the borrower must provide other supporting documentation to its lender, such as bank records, sufficient to demonstrate the qualifying payroll amount.
Documentation options for payroll tax filings include the following:
IRS Form 941 (quarterly wages); IRS Form 944 (calendar year wages); State income, payroll, and unemployment insurance filings; QuickBooks; bank repository accounts; and/or internally generated profit and loss statements. However:
- Nonprofit organizations must include IRS Form 990;
- Sole proprietors must include IRS Form 1040 Schedule C;
- Any entity that filed IRS Form 1099-MISC must include this form;
- Seasonal employers must document the period beginning February 15, 2019, through June 30, 2019
USDA has posted PPP FAQ's on their website. USDA will continue to update within the coming days, CLICK HERE to follow their posts. You'll need to scroll down to the tab that says "Paycheck Protection Program".
More extensive FAQs can be found at the Treasury Department’s CARES Act website