The Flinchbaugh’s were relieved to receive a Small Business Administration (SBA) Paycheck Protection Program (PPP) loan, which ensured they could pay employees through the crisis.
Mike Flinchbaugh’s operation is a fourth-generation family business where they grow cash crops, manage contract hog finishing barns, process fruit and run a farm market.
Critical Emergency Funds
The PPP provides SBA-guaranteed loans to small businesses facing financial hardship due to COVID-19. PPP loans cover payroll, mortgage interest, rent and utility costs throughout the eight weeks following receipt of the loan, and are forgivable if businesses meet certain criteria.
“I first heard about SBA PPP loans from our family attorney,” Mike said. “He was sending daily updates to his clients about COIVD-19.”
Time for action
As a first step towards submitting his PPP application, Mike contacted both his commercial bank and his Horizon Farm Credit loan officer. While the bank was taking applications, Horizon had not yet become an approved SBA lender. Mike suspected that the bank would take more applications and have a slower response rate, but he felt he had no other choice but to apply through them.
And then Mike waited. And waited. And waited.
A new plan
An entire week passed, and Mike still hadn’t heard if his loan had been approved. That’s when he found out that Horizon had been approved and was accepting PPP applications.
Impatient for progress, Mike pulled his original application from the bank submitted a new application to Horizon. And he was not disappointed.
“I was texting with my loan officer from 6:30 p.m. to 7:30 p.m. that night with a few final questions. The next day, we were approved,” Mike said.
Pandemic woes made manageable
The Flinchbaughs’ various businesses have felt the impacts of the pandemic in different ways.
With the social distancing mandates in place, the Flinchbaughs altered their business model to meet the needs of their retail customers. “We’ve changed our marketing model to curbside pickup twice a week. Our retail sales are up,” Mike said. “The downside – that model requires twice the labor.”
However, sales from the family’s apple processing business haven’t been so profitable. The Flinchbaughs market most of their apples to distributors that then sell them to restaurants. However, with restaurants closed and demand for out-of-home dining plummeting, the market for Mike’s apples has followed the same trajectory. Similarly, commodity grain prices dropped sharply.
This decrease in business not only affects the Flinchbaughs’ bottom line; it impacts their 16 full-time and 12 part-time employees.
The influx of cash from the PPP loan was extremely helpful. “Our next payroll was the day after the PPP funds hit our bank account,” he said. “Without the quick turn from Horizon, it wouldn’t have happened.”
Farm Credit is committed to supporting farmers, ranchers and rural communities in good times and bad, and the COVID-19 is no exception. To read more about how we’ve been supporting our customers and communities, visit our COVID-19 support page.
