On March 27, President Donald Trump signed a $2.2 trillion economic rescue package into law to support businesses, rush resources to overburdened health care providers and to help struggling families during the new coronavirus pandemic.
The CARES Act contains $9.5 billion in assistance for agriculture producers who have been impacted by COVID-19 along with a $14 billion replenishment to the Commodity Credit Corporation, according to USDA. In addition, the legislation includes $100 million in ReConnect grants to expand access to broadband in rural America for educational purposes, business and access to critical telehealth services.
In addition to the benefits for agriculture and the rural community at large, the provisions to small business will be beneficial to farm equipment dealers. The Small Business Administration defines a small business as an operation with less than 500 employees.
Eric Wareham, vice president of government affairs for the Western Equipment Dealers Assn., says the areas likely to impact dealers the most are lending and taxation provisions the of paycheck protection program, which is covered by an extension of the SBA’s 7a loans and will be 100% backed and federally guaranteed and are forgivable directly to small businesses.
“The covered period for when to apply for a loan is up to June 30th. That doesn't sound really close, but in terms of the fact that from today, the SBA has 30 days to issue guidelines and rules and regulations on this. And then to get all of the loan applications processed, that's a short window. And then from the date, from the date of the loan origination, you have an 8 week covered period to use those funds for designated purposes. And then you also need to be aware that you've got to keep track of things to certify what you use those funds for in order to get the loan forgiven down the road.”
A report that appeared in the most recent issue of Shortliner, a newsletter from the Farm Equipment Manufacturers Assn., highlighted several other points in the package, including:
- Grants to small businesses will be in the form of $10,000 advances and should come 3 days after applications are submitted
- A program has been founded to give no-fee loans to small businesses up to $10 million
- Businesses will be able to borrow up to 125% of average payroll costs over 8 weeks
Wareham and Curt Kleoppel, WEDA CFO, will go over these provisions in greater detail during a Farm Equipment webinar on April 2.