U.S. Farm Groups Fight for Access to Virus Small Business Loans

(Bloomberg) -- American farm groups are fighting for access to a small business disaster loan program expanded in response to the Coronavirus outbreak, arguing they’re being unfairly excluded.

The American Farm Bureau Federation and 30 other agricultural organizations wrote the Small Business Administration objecting to a prohibition on the application form for Economic Injury Disaster Loans barring farms and most other agricultural businesses from participating.

“Prior to COVID-19, farmers and ranchers had already experienced a drastic 24% decline in net farm income from highs experienced just six years ago,” the groups wrote in their letter. “With the further downturn in the economy, agricultural businesses are at risk of closure and may be required to lay off employees.”

The farm groups argue that the Coronavirus legislation, which expanded eligibility for the long-standing disaster lending program and added $10 billion in funding for the loans, doesn’t exclude agricultural enterprises.

The disaster loans are separate from the marquee Payroll Protection Program in the Coronavirus legislation that sets aside $349 billion in loans for small businesses that may be forgiven if the firms maintain their payrolls during the economic crisis. The disaster loans allow businesses with fewer than 500 employees to borrow as much as $2 million at 3.75% interest.

Press representatives for the Small Business Administration didn’t immediately respond to a request for comment.

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