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Groups Urge Congress to Correct PPP Eligibility Issue for Farmers
USAgNet - 03/01/2021

Dozens of farm groups have sent a letter to the House Small Business Committee, urging them to correct how the Small Business Administration (SBA) interprets Paycheck Protection Program eligibility requirements for farm and ranch operations structured as partnerships.

According to SBA's interpretation under Section 313, farmers and ranchers who operate their business through a partnership are limited to payroll costs they pay to their non-owner employees, unless they have net income from operations. Therefore, if a farmer is not operating as a sole proprietor but instead as a general partnership, with net losses on their 2019 taxes, they would not be eligible for PPP.

"We believe this interpretation is in error and is preventing many farm and ranch families from participating in the PPP," the letter explained. "We ask that you clarify to SBA that Congress intended to include farm partnerships and LLCs in Section 313," the letter added.

Meanwhile, President Biden announced changes to PPP to help very small companies access the program. As part of the changes, which began Wednesday, the SBA will exclusively accept PPP applications from companies with fewer than 20 employees for 14 days, through March 9.


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