The recently enacted Consolidated Appropriations Act of 2021 allocated $284 billion in funding for a second round of the Paycheck Protection Program (PPP) and $2.3 billion for the Coronavirus Food Assistance Program (CFAP). Fortunately, funding for the programs also comes with several – much needed – improvements.  
Paycheck Protection Program Improvements 
One of the major changes to the PPP program is that approved expenses for loan forgiveness now includes worker personal protective equipment and costs incurred to adapt businesses in response to COVID-19. In the first round of loans, the only approved expenses were payroll, mortgage interest, rent and utilities. The new installment of the PPP program also lowers the qualifying reduction in gross revenue from 50% to 25% between comparable quarters in 2019 and 2020. This was a change that was especially important for those who had experienced multiple years of losses prior to the pandemic. The final major change to the PPP program was that the loan requirement calculation transitioned from gross income to net-farm-income for those who file as sole proprietors. The previous method for establishing loans instituted in the last round of PPP left many self-employed farmers ineligible because they had reported losses. 
The Small Business Administration (SBA) began accepting PPP loan application from new applicants on January 11th and repeat applicants on January 13th. The loan application deadline for this round of PPP loans is March 31, 2021 or until funds are exhausted. To learn more about the second round of PPP loans or to begin preparing an application click here for the SBA website. 
CFAP Updates 
With the additional allocation of funds to CFAP, last week the U.S. Department of Agriculture (USDA) announced changes to the program. To better reflect market realities, the Farm Service Agency (FSA) adjusted the payment calculation for sales commodities to use the 2019 calendar year sales and 2019 crop insurance indemnities. Under CFAP2, the sales commodities include specialty crops, aquaculture, tobacco, specialty livestock, nursery crops and floriculture. The CFAP2 payment calculations for certain row crops were also adjusted, addressing an issue that existed for producers who had crop insurance coverage but did not have a 2020 Actual Production History-approved yield. USDA also clarified that contract producers of broilers, turkeys, chicken eggs, laying hens and hogs who suffered a drop in revenue in 2020 due to the pandemic are now eligible for assistance. Individual producers who can show that they suffered a decline in revenue from 2019 to 2020 are eligible and encouraged to apply for the program. For a more detailed overview of the changes, click here.  
Newly eligible producers who need to submit a CFAP2 application or producers who need to modify an existing one can do so between January 19 and February 26, 2021. Producers who are modifying their applications should contact their local USDA Service Center for assistance. Remember, most local FSA offices are still accepting visits by appointment only, so make sure that you call early to get on their schedule. Additional information can be found by calling 877-508-8362 on USDA’s CFAP website