Farmers and Ranchers
If you are a farmer or rancher looking to obtain either a First Draw or Second Draw loan, there are a few important factors you must consider when applying:
See below for more details.
Determining Which Loan to Apply For
If you’ve obtained a previous PPP Loan and have not gone through the forgiveness process, you can request an increase to your existing PPP loan. Read below for information on how to calculate your new loan amount.
If you’ve already applied for forgiveness, you would be applying for a Second Draw loan using the loan calculation formula below. In order to qualify for a Second Draw Loan, you must demonstrate a reduction in revenue. Additional details about revenue reduction and eligibility requirements for a Second Draw loan can be found here.
Loan Calculation Formula for Farmers and Ranchers
If you are a farmer or rancher, you can calculate you loan amount using gross income instead of monthly payroll costs. How you calculate your maximum loan amount depends upon whether you employ other individuals.
Farmers and Ranchers With No Employees
If you have no employees, the following methodology should be used to calculate your maximum loan amount:
You must provide the 2019 or 2020 (whichever you used to calculate loan amount) Form 1040 Schedule F with your PPP loan application to substantiate the applied-for PPP loan amount and a 2019 or 2020 (whichever you used to calculate loan amount) IRS Form 1099-MISC detailing nonemployee compensation received (box 7), invoice, bank statement, or book of record that establishes you are self-employed. You must provide a 2020 invoice, bank statement, or book of record to establish you were in operation on or around February 15, 2020.
Farmers and Ranchers With Employees
If you have employees, the following methodology should be used to calculate your maximum loan amount:
You must supply your 2019 or 2020 (whichever you used to calculate loan amount) Form 1040 Schedule F, Form 941 (or other tax forms or equivalent payroll processor records containing similar information) and state quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever you used to calculate loan amount) or equivalent payroll processor records, along with evidence of any retirement and health insurance contributions, if applicable. A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish you were in operation on February 15, 2020.
Any employee payroll costs should be subtracted from the farmer’s or rancher’s gross income to avoid double-counting amounts that represent pay to the employees of the farmer or rancher.
How to Apply
Talk with your banker for details on how to apply.
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