More SE Farmer PPP Loan Detail

This post is still subject to guidance from the SBA and thus the actual rules may be different when finalized.  We have gotten several questions on this subject and here is a summary of those questions with answers.

Q. I am a Schedule F farmer and did not receive a loan the first time around since I showed a net loss on my Schedule F.  Can I still receive a loan since my gross receipts are greater than $100,000?

A. The answer is like most questions – It Depends.  If the farmer has not gotten forgiveness on the loan, then they can go back to the lender and have the lender recalculate the new loan amount and get that as a “first” PPP loan.  However, if the farmer has received forgiveness already (likely due to the bank requiring it before year-end), then our reading of the new bill is the farmer is not allowed to get additional funds on the “first” PPP loan.

Q. Since I am able to get the additional amount of “first” PPP loans based on my gross receipts, can I get a second PPP loan?

A. Again, the answer is it depends.  If you had gross receipts in a 2020 quarter compared to the same quarter in 2019 that was at least 25% lower then you qualify for another round of PPP loans.  Likely the loan amount will be the same (plus the $20,833 loan for your SE earnings assuming you had gross receipts of at least $100,000).

Q.  What is included in gross receipts?  Do I have to include gains on sale of equipment, gain on sale of breeding stock, etc.?  

A.   We will need to get guidance from SBA on this question.  Our assumption is that you will include all of those items, but no-one knows for sure right now what they will or will not include.

Q.  I am a partner in a partnership and our net income from the partnership was a loss but our gross receipts were high.  Will we qualify for an increase in our PPP loan (first or second) based on our “earnings”?

A.  We don’t know for sure.  Based on our initial reading of the bill, it appears this increase only applies to Schedule F type farmers, thus partners are stuck with no increase in their loan amount.  However, they may still qualify for a second round of PPP loans if gross receipts were at least 25% lower in any quarter in 2020 compared to 2019.