A Discussion on the CARES Act--Loans, Grants, and Business Relief Webinar

Presented by AmericanHort, watch webinar here.

Webinar Summary by CNGA (not intended to be all-encompassing or as business advice): 

Things have been changing rapidly and will probably continue to change. This is what we know TODAY - could change as things move forward.

These are the available programs: 

Paycheck Protection Act  - $349 Billion - forgivable loan program

$500B Economic stabilization - Dept. of Treasury - will be used for business stabilization of airlines, etc., large businesses affected by the virus

$9.5 B to Secretary of Ag - not yet known how this will be used - language includes “Specialty Crops” which includes nursery and greenhouse. Language is very broad.

$14B Commodity Credit Corp - Will probably go to trade disruption payments to commodity growers who were injured by trade disputes.

The two programs available right away which are relevant to Nursery and Greenhouse businesses:

#1 - PPA - $349 billion - could become oversubscribed. Businesses need to act early to determine if you are eligible and if it fits for you, applications open on Friday. You need to go to a SBA lender to apply for this, you don’t apply through a government institution. You may want to communicate with your lender in advance, they will be busy. Loans applications open Friday, April 3, are available through June 30, 2020. If you are interested in this program, you should move quickly but wisely.

For small businesses (under 500 employees); not limited by SBA  income limitations for small business concerns.

Loan amount is based on your payroll  - $10M or the maximum amount of 2x your monthly average payroll during the previous year before the loan.

Includes payroll costs - salary, wages, commissioner or tips (up to $100K), Employee benefits - vacation, parental/family/sick/vacation leave, group health insurance premiums, retirement benefits, state and local taxes, 

Forgiveness: if you follow all the rules, including using no more than 25% of the amount for non-payroll (rent, utilities), all of this debt could be forgiven. 

Funds that are not forgiven will be termed out for a maximum 2-year period with a maximum 0.5% interest. 

#2 - SBA Economic Injury Disaster Loan (EIDL)  - for businesses with fewer than 500 employees. $10B in funding available for EIDL, can borrow up to $2M. The application process is currently open, begin your application process online. These loans are available until December 31, 2020. 

As of right now, the consultants giving this seminar believe that Ag businesses WILL be eligible, which would be a change from SBA programs in the past.  AmericanHort will keep us posted. The application information on the SBA website specifically says the following are eligible: aquaculture enterprise, agricultural cooperative, or nursery

Your associations are signing on to a letter to SBA and encouraging members of Congress to support Ag Businesses being eligible for this program. 

This loan is for: 

  • Repaying obligations that can’t be met due to revenue losses

  • Meeting increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains

  • Making rent or mortgage payments

  • Maintaining payroll (IF you are NOT using the PPP for payroll)

  • Providing sick leave to employees unable to work due to direct effect of COVID-19

This is not eligible for forgiveness. Except for an emergency payroll provision of a maximum for $10,000K 

You can receive both loans (PPP and EIDL), but you can’t use them to pay for the same thing. 

More helpful information here:  The Small Business Owner’s Guide to the CARES Act from the U.S. Senate Committee on Small Business and Entrepreneurship