The U.S. Small Business Administration (SBA) Friday morning published an interim rule indicating that most cooperatives are now eligible for the Paycheck Protection Program, which provides low-interest loans of up to $10 million. Issued by private lenders and guaranteed by SBA, these loans can be forgiven if borrowers meet certain requirements.
NCBA CLUSA led the effort to ensure SBA included cooperatives as eligible borrowers.
According to the interim rule, most sectors of the cooperative community can now access Paycheck Protection Program loans, including agriculture, purchasing, consumer food, and worker cooperatives. It remains unclear whether other sectors will be eligible for this rapidly evolving program. NCBA CLUSA continues to work with the entire cooperative community to ensure all cooperatives are eligible for this critical assistance.
“This is good news for many cooperatives and their employees,” said Doug O’Brien, president and CEO of NCBA CLUSA. “The severe economic effects of this pandemic do not discriminate on the basis of business structure, and neither should the Paycheck Protection Program. While we appreciate this recent guidance from SBA, we pledge to continue to work with the co-op community to make sure that all employees of co-ops are covered.”
Paycheck Protection Program loans can be used to cover payroll—including wages, paid leave, group health care payment and retirement benefits—rent, mortgage interest obligations, utilities and interest on any other debt incurred before the covered period. If a borrower meets certain requirements—including maintaining payroll—much of the loan can be forgiven. Importantly, PPP loans do not require a personal guarantee.
Note: If your co-op is ineligible for a PPP loan, you can still qualify for an Economic Injury Disaster Loan. All cooperatives are eligible for this SBA program. Read our FAQ. Find the latest advocacy updates on NCBA CLUSA’s COVID-19 resource page.