Emergency Actions for Small Farm and Food Businesses in Response to COVID-19

This will stay a regularly updated article as long as things are swiftly moving with COVID-19 updates. As of April 24, 2020, here is what is available to you as a small business owner in Pennsylvania.

Here at Penn State Extension's Business Management Team – we are working daily to ensure you, as an essential business, have the latest updates to navigate resources and information amidst an international crisis. We are working alongside you in response to Governor Wolf's statement on regulating business operations in Pennsylvania and allowing essential businesses to remain open with extreme caution and practice for the well-being of the public.

Agricultural and food are essential businesses for a safe and accessible food supply. Please be aware that the list of essential businesses is open for public to view and it's possible it could change at any time. So please keep an eye open for updates and remember, you are also able to submit a waiver to remain open if a change in the essential list closes your business.  

Small business emergency loans and grants can provide a safety net now for essential farm and food businesses. The public, in general, has seen dates on stay at home orders, moved twice, in response to positive test and death rates and no one is certain when restrictions to operate to full capacity will be lifted. Interest rates on relief loans are the lowest you may ever see in the coming months to years, but the sheer number of businesses in need has continually exhausted federal, state, local, and private funds made available to small business owners. It is important that if you do not already, that you make it a priority to have your business and financial documents in order so that you can apply quickly to any funds available for your business including loans, unemployment, grants, or aid.

Emergency Funding for Small Businesses

The Economic Injury Disaster Loan assistance declaration issued by Phase I of the Relief Bill and managed by the SBA, made loans available to small businesses and private, non-profit organizations in designated areas of a state or territory to help alleviate economic injury caused by the Coronavirus (COVID-19). These loans were used to pay fixed debts, payroll, accounts payable and other bills that can't be paid because of the disaster's impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%. Update: These funds ran out on April 16, 2020.

The Pennsylvania Department of Community and Economic Development has created COVID-19 Working Capital Access Program (CWCA) Any for-profit businesses located in PA and with 100 or fewer employees worldwide are eligible to apply for disaster relief loans. There is $61 million in total available across the Commonwealth as of March 23, 2020.  Maximum loan size per company is $100,000.  All CWCA loan applications must be submitted through a Certified Economic Development Organization (CEDO) and you would seek that CEDO in the county of your business's address. For the list of CEDO's operating within Pennsylvania, please refer to the CEDO webpage.
Note: Funds are expected to be in high demand. It is very likely the demand for loan funds will outstrip supply. Update: This loan program closed on March 25, 2020.

The Senate passed an increase to the CARES Act, now HR 266 Paycheck Protection Program and Healthcare Enhancement Act, for an additional $480 Billion in interim funds, $380 Billion of which is to go to small business loans. This $380 Billion is divided then between additional funds for the Paycheck Protection Program ($310 Billion) and additional funds for the Economic Injury Disaster Loan Program ($10 Billion). The legislation would require the SBA to use at least $60 billion of the PPP subsidy to guarantee loans made by smaller depository institutions, credit unions, and community financial institutions. The President signed into law on 4/24/2020 and updates to final rule and opportunities to apply for funding will be provided by Extension through live webinars, updates to this article, and news items on the Extension Coronavirus landing page.

American Farmland Trust has developed and launched the Farmer Relief Fund, which will award farmers with cash grants of up to $1,000 each to help them weather the current storm of market disruptions caused by the coronavirus crisis. Initially, eligible applicants include any small and mid-size direct-market producers. These are defined as producers with annual gross revenue of between $10,000 and $1 million from sales at farmers' markets and/or direct sales to restaurants, caterers, schools, stores, or makers who use farm products as inputs. The Application is open and ongoing based on funds they are continually raising. The application will be simple and easy to complete but will include sufficient detail to ensure AFT is awarding producers that have the greatest needs. Applicants will be asked to estimate their financial loss.

Facebook Small Business Grants is offering $100M in cash grants and ad credits for up to 30,000 eligible small businesses in over 30 countries where we operate. The program funds are to be used to: keep your workforce going strong; help with your rent costs; connect with more customers; cover operational costs. Program will open in the weeks to come, and in the meantime, Facebook has launched a Business Resource Hub in response to COVID-19. The grants will open up on certain dates in specific areas. 

Mainvest, an investment platform that connects brick & mortar businesses with investors who care is offering a $2,000 0% interest loan when you startup a Mainvest capital campaign for your business.

Honeycomb Credit Crowdfunded Relief Loan for small businesses. To help deliver the working capital that businesses may need in this critical time, Honeycomb is offering 45-day payment free periods, 6-month interest-only periods, and reductions in posting, success, and investor fees. They are also streamlining their internal due diligence to connect businesses with local investors as quickly as possible. This relief loan option is community funded via the Honeycomb crowdfunding platform.

The James Beard Foundation has created and is currently funding, a Food and Beverage Industry Relief Fund. This will be a fund to assist food and beverage businesses with less than 500 employees in bouncing back from closures, reduced business hours, and lost sales.

Kiva Zip is encouraging small businesses to upstart a Kiva Zip funding campaign on their platform. Effective immediately, U.S. applicants for a Kiva loan will have: expanded eligibility; maximum loan increase from $10,000 to $15,000, and; new borrowers may access a grace period of up to 6 months for greater financial flexibility.

Payment Deferments and Moratoriums

From the IRS to Student Loans, many institutions are providing temporary relief of debt for US residents and small business owners. This should be your first line of defense to protect your cash flow and slow the rising tide of debt.

The IRS has issued a delay in income tax payments until July 15^th with no penalty on delayed payments or filing.

The Department of Education has issued some minor relief on student loan debt. Effective March 13, 2020, the interest rate on all federally held student loans will temporarily be reduced to 0% for at least 60 days. This 0% interest rate will remain in effect until the Department of Education issues an end date. This 0% interest rate change will be applied to all federal loans in any status (in school, in grace, in repayment, in deferment/forbearance, etc.). In addition, borrowers are offered 6 (six) month emergency administrative forbearance. You can check with your Student Loan Servicer for specific information on your loan options related to the mandate.

In connection with the Presidentially-declared COVID-19 National Emergency, USDA's Rural Development has put several changes in place. First, there is a foreclosure and eviction moratorium on all USDA Single Family Housing Direct (SFHD) loans for 60 days effective 3/19/2020. Under the moratorium, foreclosures on borrowers with USDA SFHD loans will be completely suspended. USDA will not initiate, process, or complete any foreclosures during this time. There are as well, support programs for Multi-Family Housing and Rural Utility Services. In addition, Rural Business Development has created several extensions and deferrals. All program information can be found on the website.

Temporary Layoffs and employee management and support

Many employers are asking how they should take care of their employees and save their business during this crisis. If you are working quickly to make the best decision for your business, please go to the Unemployment Compensation of PA website to review labor laws, their decision-making tool for handling employee layoffs and use of paid leave, etc.

Unemployment compensation benefits were extended for W-2 employees laid off due to COVID-19. In addition, unemployment compensation benefits were extended to sole-proprietors and independent contractors. You can find out more detailed information on understanding your status in this informative Extension article.

The Social Enterprise, Modest Needs has started a fund to assist hourly workers who may not be able to receive unemployment compensation or other resources and are out of work due to the COVID-19 crisis. You can support your employees by directing them to the site to apply.

And finally, the United Way has started an emergency relief fund for those affected the hardest by the COVID-19 changes. The funding awareness can be found on their worldwide homepage, but Pennsylvania's can go to their regional page for emergency relief hotline and ways to access aid.

Southwestern PA

United Way of Chester County

United Way of Bucks County

United Way of Lancaster County

United Way of Lebanon County

United Way of Greater Philadelphia

United Way of Mountain Region

United Way Capital Region

Because the COVID-19 pandemic is so swiftly moving here in the United States and in our home state of Pennsylvania, we will work to keep this article up to date. The Penn State Extension Business, Entrepreneurship, and Economic Development Team is here to provide the most relevant information and resources to farms and food businesses. Please check our website regularly for workshops, webinars, articles, and forums to help you navigate this new and ever-changing environment. We are here to assist and support you.