Given the way Paycheck Protection Program (PPP) loan calculations were originally computed, farmers and ranchers had a difficult time accessing these loans the first time they came available. With the passing of the Consolidated Appropriations Act in December 2020, farmers now have the ability to receive a more robust second draw PPP loan than was initially the case. In addition, farmers can work with their bankers to increase the amount they may have received during the first round of PPP loans last summer based on the current changes.

The key point to note is that self-employed farmers and ranchers who use Schedule F to report their net farm activity to the IRS are now permitted to use the larger Gross Income amount on line 9 of the Schedule F, rather than the reduced Net Farm Profit or Loss from line 34. Given that many farmers and ranchers may not always show a profit on their Schedule F, this could work in favor of many individuals. 

The maximum loan amount remains capped at the equivalent of 2.5 months’ worth of income on up to $100,000, or $20,833 for a farmer with no employees.

If you are a farmer who applied for and received a first round of PPP funding before August 8, 2020, but you have not yet received forgiveness for this loan, please contact your banker to discuss increasing that loan per the new rules.  

This information is current as of February 9, 2021. If you have questions, please feel free to reach out at any point.