WASHINGTON, D.C. – The National Corn Growers Assoc.  (NCGA), is urging Congress to work with the U.S. Small Business Administration (SBA) to ensure farming partnerships and limited liability corporations are able to participate in the Paycheck Protection Program (PPP) as part of the COVID-19 relief bill President Trump signed into law last December. 

The organizations are asking Congress to consider extending the current March 31 enrollment deadline to allow eligible farmer and rancher partnerships and limited liability corporations enough time to enroll in the program.

Working alongside K·Coe Isom, a Loveland, Colo.-based food and agriculture consulting firm, the National Corn Growers Assoc., and a coalition of 35 agriculture organizations, sent a letter to the U.S. Senate Committee on Small Business and Entrepreneurship, and the U.S. House Committee on Small Business.

Among the 35 organizations represented are the American Farm Bureau Federation, Farm Credit Council, the National Cattlemen’s Beef Assoc., the National Cotton Council, the National Milk Producers Federation, and the National Pork Producers Council)  

In a Feb. 24 letter, the organizations said it is critical for U.S. farmers – many of whom have structured their operations as partnerships and limited liability corporations – to receive program funding regardless of tax structure.

“As you know, farming and ranching are capital-intensive operations, often operating at a loss, and with owners who frequently do not work for wages,” the organizations wrote.

A limited liability corporation allows members to take advantage of the benefits of both the corporation and partnership business structures. Limited liability corporations protect against personal liability in most instances, personal assets – like a vehicle, house, and savings accounts – which won’t be at risk in case the limited liability corporation faces bankruptcy, or lawsuits, the Small Business Administration said.

According to the American Farm Bureau Federation, “the Paycheck Protection Program is basically designed to help small businesses remain in operation, and keep their employees paid through this turbulent time.” The program provides forgivable loans to small businesses to pay employees and keep them on the payroll. 

Moreover, the program will provide loans of up to $10 million to eligible business to cover 2.5 times the average monthly payroll costs, measured over the 12 months preceding the loan origination date, plus an additional 25 percent for non-payroll costs. 

In addition, payroll costs include salaries, commissions and tips; employee benefits (including health insurance premiums and retirement benefits); state and local taxes; and compensation to sole proprietors, or independent contractors. 

Non-payroll costs include interest on mortgage obligations, rent and utilities. These loans have an interest rate of 1 percent, but the portion that covers eligible expenses is forgivable as long as the company maintains staff and payroll.

On Dec. 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a $908 billion relief package, which includes an update to the paycheck protection program for U.S. farmers and ranchers. It also provides the Small Business Administration with an additional $284 billion for paycheck protection program loans.

The act made changes to the initial eligibility requirements for the paycheck protection program, recognizing the special circumstances of those working in agriculture, and helping many farmers and ranchers participate in the program. 

However, since then, the 35 organizations said the Small Business Administration has interpreted the bill’s language to exclude farm and ranch operations structured as partnerships and limited liability corporations.

“We believe this interpretation is in error and is preventing many farm and ranch families from participating in the paycheck protection program. We ask that you clarify to the Small Business Administration that Congress intended to include farm partnerships and limited liability corporations,” the organizations wrote.

Michael Roth, senior advisor for the Small Business Administration, said it is working to create “an inclusive economy, focused on reaching women-owned, minority-owned, low- and moderate-income, rural, and other underserved communities in meaningful ways.”

“While reported data illustrates we have made real strides in ensuring these funds are reaching underserved communities, we believe we can still do better,” he said.