USDA announces loan program for struggling farmers

Posted at 10:59 AM, May 21, 2020
and last updated 2020-05-21 13:01:08-04

The United States Department of is making available up to $1 billion in loan guarantees to help rural businesses meet their working capital needs during the coronavirus pandemic.

As Idaho News 6 has reported, farmers and ranchers across the state have been hit hard by the coronavirus pandemic. Some have even been forced to dump product or throw it away.

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The goal of the loan program is to help those farmers and ranchers keep the lights on. The USDA says those who aren't eligible for the loans can still get funding under USDA provisions in the CARES act.

“Under the leadership of President Trump, USDA is committed to being a strong partner to rural businesses and agricultural producers and being a strong supporter of all aspects of the rural economy,” Secretary Perdue said. “Ensuring more rural agricultural producers are able to gain access to much-needed capital in these unprecedented times is a cornerstone of that commitment.”

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In addition to expanding eligibility to certain agricultural producers, the changes will allow the USDA to:

  • Provide 90 percent guarantees on B&I CARES Act Program loans;
  • Set the application and guarantee fee at two percent of the loan;
  • Accept appraisals completed within two years of the loan application date;
  • Not require discounting of collateral for working capital loans, and
  • Extend the maximum term for working capital loans to 10 years.

B&I CARES Act Program loans must be used as working capital to prevent, prepare for or respond to the effects of the coronavirus pandemic. The loans may be used only to support rural businesses, including agricultural producers, that were in operation on Feb. 15, 2020.

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USDA says it intends to consider applications in the order they are received. However, the Department may assign priority points to projects if the demand for funds exceeds availability.

USDA announced the expanded B&I CARES Act Program authorities in a notice published in the May 21. Program funding expires Sept. 30, 2021.

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Eligible applicants may contact their local USDA Rural Development State Office.

USDA is developing application guides for lenders and borrowers on the B&I CARES Act Program.

The Agency also will host two webinars to provide an overview of program requirements.

To register for the webinar on Wednesday, May 27 at 3:30 p.m. Eastern Time, click here.

To register for the webinar on Wednesday, June 3 at 2:00 p.m. Eastern Time, click here.