Last week, U.S. Representatives Abby Finkenauer (D-IA) and Dan Bishop (R-NC) introduced bipartisan legislation that would permit farmers to use money from loans acquired through the Paycheck Protection Program (PPP) to pay for rentals of equipment, land, and buildings. The proposed bill is titled the Expanding Assistance to Farmers Act of 2020 (H.R. 7619) and is endorsed by both the Iowa Farm Bureau and American Farm Bureau Federation.
Currently, PPP recipients must use at least 60% of their PPP loan on payroll expenses in order to obtain full loan forgiveness. This requirement is unfavorable to small farming operations that primarily shoulder expenses related to equipment and real estate.
The Expanding Assistance to Farmers Act of 2020 would clarify PPP rules regarding requirements for loan forgiveness are ensure they are applied uniformly to all entities receiving funds. This includes allowing farmers to use forgivable funds for rental payments on items essential to their operations like tractors, combines, forage harvesters, planters, sprayers, hay rakes and wagons, field equipment, irrigation equipment, tools, supplies, etc.
The proposed legislation has only been introduced in the House as of yet. It must pass both chambers of Congress and receive a signature from the President before going into effect.