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Once locked out of some SBA loans, agriculture now has edge

Travel industry calls move unfair

SBA Administrator Jovita Carranza noted Monday that the agency has been unable to provide emergency relief to agriculture for more than 30 years.
SBA Administrator Jovita Carranza noted Monday that the agency has been unable to provide emergency relief to agriculture for more than 30 years. (JIM WATSON/AFP via Getty Images)

The U.S. Travel Association is crying foul after the Small Business Administration decided for now to take applications just from farmers and agricultural businesses for the $50 billion Economic Injury Disaster Loan program.

“Excluding major segments of the economy from emergency relief funding not only hurts small businesses and workers, but jeopardizes the strength of the broader economic recovery,” Tori Emerson Barnes, the association’s public affairs and policy executive vice president, said in a written statement Tuesday.

Barnes said opening the SBA application portal to only agriculture-related businesses would undermine recovery efforts from COVID-19 in the broader economy. The Economic Injury Disaster Loan program provides up to $2 million in low-interest loans and $10,000 in grants. The interest on a loan for up to 30 years is 3.75 percent for small businesses and 2.75 percent for nonprofits.

“Non-profit entities — such as destination marketing organizations and arts and culture groups — are essential for driving consumer demand to their regions, and therefore will be major engines of the recovery,” she said.

SBA’s action is a reversal of fortune for many segments of agriculture that were ineligible for the program when Congress appropriated COVID-19 emergency funds for the Economic Injury Disaster Loan program in a March economic relief bill. Aquaculture or fish farming, plant nurseries and agricultural cooperatives qualified under the narrow definition on the books at the time.

Farm groups pushed for a broader definition of agriculture to apply to any new Economic Injury Disaster Loans and grants. The broader definition was included in the most recent relief bill, but there is no language in the law giving a preference to agriculture. Congress replenished the loan fund with $50 billion and increased the grant money from $10 billion to $20 billion.

SBA spokeswoman Carol R. Wilkerson said the agency is trying to meet several priorities with its decision on the economic injury money.

“At this time, only agricultural business applications will be accepted due to limitations in funding availability and the unprecedented submission of applications already received,” Wilkerson said via email Tuesday. “SBA made this programming decision in order to provide the greatest emergency funding relief to as many small businesses, private non-profits, and agricultural businesses as possible.”

Small Business Administrator Jovita Carranza seemed to indicate in a statement Monday that the agency was trying to be equitable in dealing with agriculture by first processing applications submitted by previously ineligible agriculture enterprises before April 15. Applications from other industries submitted during that same period will be addressed after that in the order in which they arrived.

“For more than 30 years, SBA has been prohibited by law from providing disaster assistance to agricultural businesses; however, as a result of the unprecedented legislation enacted by President Trump, American farmers, ranchers and other agricultural businesses will now have access to emergency working capital,” Carranza said in the statement. “These low-interest, long-term loans will help keep agricultural businesses viable while bringing stability to the nation’s vitally important food supply chains.” 

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