On Thursday, the Small Business Administration posted this message on its website: "The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding ... Similarly, we are unable to enroll new PPP lenders at this time." Adding to weeks of frustration felt by one of the nation's largest agricultural lenders, Farm Credit.
"I got an email this morning that said we funded our first loan at 7 o'clock this morning. And at 10 o'clock this morning, the funds were out," said Todd Van Hoose, CEO of Farm Credit Council.
Farm Credit Council serves more than 500,000 farmers and ranchers all over the US.
"So, you know, I don't blame anybody. This was an impossible task," Van Hoose said. "And, you know, unfortunately, the net result is a lot of farmers were in the back of that line when the money ran out."
The $349 billion Paycheck Protection Program was established in late March by the CARES Act, part of the effort to boost the economy in the wake of the coronavirus pandemic. It allowed small businesses to apply for a loan to cover the cost of payroll, rent, utilities and mortgage payments.
But in order for banks to process those applications, they had to be SBA-approved lenders. At the time, most of Farm Credit’s branches weren’t. That meant they had to scramble.
"We got the first one approved probably middle of last week, and maybe two or three more. A big chunk of them across last weekend," said Van Hoose.
Now that the SBA has stopped enrolling new lenders, it’s unclear what will happen to the applications of banks currently in the process of being approved. Newsy reached out to the SBA for clarification, but a spokesperson reiterated: “The SBA is unable to enroll any new PPP lenders.”
"I just got a note from one of our farm credit associations, work through the night. They still had about a dozen applications in their office when the money ran out," Van Hoose said. "And they know there are more customers who probably want to submit applications but haven't yet. And they're holding off communicating because we don't quite know what to tell people."
It’s the latest in what has been a process riddled with questions from farmers and ranchers about how to apply and how they can use the aid. The pandemic has quickly disrupted entire supply chains all around the country, including the dairy and livestock industries.
"So I'm hopeful that SBA will take a position that, hey, let's continue to process applications. Let's get them approved pending funding," Van Hoose said. "And then if Congress drops more money in there, those will be first in line. I don't really know if their system will handle that, but I'm hopeful that that's the outcome here. But again, not certain."
As of today, the agriculture industry received just a fraction of the total aid approved by the SBA. Congress is now negotiating on how to replenish the fund.
