Senate Passes COVID-19 Relief Act for Hemp Farmers
In December of 2018, hemp became a legal commodity crop in the U.S., giving the hemp retailer and hemp farmer the same protections awarded to traditional agricultural businesses under the Farm Bill. Under the law, farmers are provided monetary relief when crop failures occur due to natural disasters. However, the disaster relief programs historically offered through the Small Business Administration (SBA) excluded farmers.
The impacts on small businesses from COVID-19 can be devastating. The SBA passed the Economic Injury Disaster Loan program in an effort to mitigate the financial impacts caused by the sweeping stay-at-home orders in a majority of states, which have led to the shuttering of small businesses across the country. These closures extend to the hemp retailer, while also causing disruptions in extraction and manufacturing.
In its original form, the program excluded farmers, as similar programs have in the past. However, through the efforts of farmers and agriculture associations, hemp industries are now included in the program.
Help for the Small-Scale Hemp Farmer
The expanded Economic Injury Disaster Loan program provides assistance to small businesses with fewer than 500 employees. The inclusion of the hemp industry in the legislation is not limited to growers; hemp-related businesses can apply for relief as well. At the time of this writing, the SBA is only accepting loan applications from the agricultural industry. The loan program and the Paycheck Protection Program are two primary benefits found in the new policy.
The program offers loans up to $10,000 for a temporary loss of revenue due to the coronavirus. A hemp retailer, manufacturer or farmer is eligible to apply for the loans. Funds received can be used for payroll, fixed business debts, accounts payable, and other outstanding bills that cannot be paid due to current and future COVID-19 crises. Loan repayment stipulations are determined on a case-by-case basis and based on ability to pay. Thus, industrial hemp farms, for example, that continue to see economic losses might be eligible for loan forgiveness.
Paycheck Protection Program
The SBA also offers a Paycheck Protection Program, created to incentivize small businesses to keep employees working during the coronavirus pandemic. A small-scale hemp farmer who employs workers for planting or harvesting or a hemp retailer who keeps employees on payroll can apply for a loan. The program requires business owners to maintain all of their workers at their current salaries for at least eight weeks. The money borrowed can be used for rent, mortgage interest and utilities; however, at least 75% of the loan amount must be used for payroll. If used as stipulated, the loan does not have to be repaid.
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