Farm Credit institutions have worked tirelessly to help customers access critical emergency funds in the face of COVID-19.
Many Farm Credit lenders across the country have routinely labored into the night to submit applications on behalf of our customers for loans through the federal Paycheck Protection Program (PPP).
Helping customers retain employees
Lacking access to the markets they depend on, producers across the country have felt pressure to cut costs wherever they can, including labor costs. But letting employees go, especially people who have been with the business for years, during times like these? No one wants to do that.
While farmers and other small business owners faced stressful decisions ahead, the federal government authorized PPP, a program that provides Small Business Administration-guaranteed loans to small businesses facing financial hardship due to COVID-19. And for some farmers, PPP seemed like the answer they so fervently needed.
PPP loans cover payroll, as well as mortgage interest, rent and utilities for the eight weeks following receipt of the loan and are forgivable if businesses meet certain criteria. PPP loans promised farmers the financial support they needed to retain employees, if only they could figure out how to get one. That’s when farmers turned to Farm Credit for support.
As with many federal programs, PPP wasn’t without its implementation challenges. One such problem was that Congress didn’t allocate enough money to the program as compared to the magnitude of need across the country. But Farm Credit was not deterred. Our employees worked around the clock, surmounting numerous roadblocks to submit nearly 3,000 PPP loan applications to SBA, resulting in over $500 million in support for our customers.
Relationships make all the difference
These painstaking efforts taken by dedicated Farm Credit employees have had tremendous impacts on farm families. Take, for example, Karen Paulus of Paulus Mt. Airy Orchards, a Horizon Farm Credit customer.
Paulus Mt. Airy Orchards is a family-owned farm and agri-tourism destination in York County, Pennsylvania. Karen first applied for a PPP loan through her commercial bank and then waited and waited as she watched her friends’ applications get approved. When she heard Horizon was accepting applications, Karen canceled the one with the bank and submitted a new application to her loan officer. That was on a Wednesday. By the following Friday, her business received PPP loan approval. “It was night and day, working with Horizon,” she said. “We would have started with Horizon if I had realized how much better the process would be.”
Not a moment too soon
The Flinchbaugh family, also of York County, Pennsylvania, had a similar experience. A fourth-generation family business, the Flinchbaughs grow cash crops, manage contract hog finishing barns, process fruit and run a farm market.
Mike Flinchbaugh first submitted a PPP loan application through his local bank. However, a week after receiving an email from his bank confirming application receipt, Mike was still waiting for loan approval. Soon, he learned that Horizon had become an approved SBA lender. “I submitted a new application to Horizon and was texting with my loan officer from 6:30 to 7:30 p.m. the same night with a few final questions. The next day, we were approved.”
With 16 full-time and 12 part-time employees, the PPP cash was critical for the Flinchbaughs’ business. “Our next payroll was the day after the PPP funds hit our bank account,” Mike said. “Without the quick turnaround from Horizon, it wouldn’t have happened.”
Regardless of the challenges brought on by PPP, Farm Credit associations would go through the whole process again if it meant supporting our customers to the best of our ability during such uncertain and unprecedented times.
This is the second blog post in the series, “Farm Credit COVID-19 Response.” Read on for information highlighting how Farm Credit customers have adapted to sustain their businesses through the crisis.