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It may be years before we clearly understand the economic impact on the horticulture industry as a direct result from the novel coronavirus, or COVID-19. As with any emergency or disaster, whether it’s a hurricane or recession, there’s a good news-bad news element. The good news is that consumers have been sheltering in place at home, which has created a surge in gardening interest and purchases. Social media is bursting with photos, ideas, videos, hashtags and memes related to plants, both ornamental and edible. Some growers report their IGC customers had record sales in April. (See what nursery crop growers said about their business and regions starting on page 8.) The bad news is that some states (at press time), particularly Pennsylvania and Michigan, would not allow IGCs to operate at all, while others permitted IGCs to operate under certain circumstances that conformed to social distancing mandates. In true green industry fashion, many retail garden centers have found ways to continue business with curbside pickup or delivery after online or call-in orders have been placed.

With nearly the entire country on pause, there are some cash flow issues in the industry and some payments for plants have slowed. There have been reports of some shipping hiccups with the demand for grocery shipments at an all-time high.

The federal government reacted with relief funds for small businesses. Please understand that these programs are subject to change quickly. Check the websites we’ve provided, as well as with your bank and accountant for additional help.

SBA Economic Injury Disaster Loan (EIDL)

The SBA’s EIDL program is for any small business with fewer than 500 employees affected by COVID-19. The Senate relief legislation passed in late April authorizes agriculture/horticulture businesses to apply for the EIDL. That legislation was expected to pass the House at press time. The program includes a $10,000 emergency grant and $15,000 in low-interest loans.

Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.

According to a K Coe Isom and AmericanHort webinar in April, EIDL can be used along with Paycheck Protection Program (PPP) funds, but you are not permitted to use it for the same expenses as the PPP. In other words, if you’re making payroll with the PPP, you are not permitted to use EIDL monies to also make payroll.

The EIDL covers operating expenses and working capital, including rent or mortgage payments. It can be used for payroll if you did not receive PPP funds. It may also be used to provide sick leave to employees unable to work as a direct result of COVID-19.

Interest rates are 3.75% for small businesses with a maximum payback period of 30 years.

For more details and to apply for EIDL funds directly from the SBA at https://bit.ly/SBA-funds-EIDL.

USDA funds

The USDA will receive $9.5 billion to deliver agricultural sector relief. The funds are supposed to include assistance to specialty crop producers, according to Craig Regelbrugge, senior vice president at AmericanHort. The association sent a letter to Ag Secretary Sonny Perdue in early April asking that the funds be divvied up fairly, as the nursery and floriculture sector is valued at more than $16 billion, the letter states. Watch www.americanhort.org/Coronavirus for updates.

Main Street Lending Program

The Federal Reserve’s Main Street Lending Program seeks to assist banks in extending credit to small- and medium-sized businesses which were in good financial standing before the crisis by offering four-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion, according to AmericanHort. Firms seeking Main Street loans must commit to make reasonable efforts to maintain payroll and retain workers as well as following compensation and other restrictions that apply to direct loan programs under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Employee Retention Tax Credit

The Employee Retention Credit is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees after March 12, 2020, and before January 1, 2021. Eligible employers can get immediate access to the credit by reducing employment tax deposits they are otherwise required to make. Also, if the employer's employment tax deposits are not sufficient to cover the credit, the employer may get an advance payment from the IRS.

The IRS explains the details here: irs.gov/coronavirus/employee-retention-credit

State, county, and city funds

Many states have COVID-19 relief funds for small businesses. Check with comptroller offices, economic development departments (www.eda.gov/resources) and state legislatures.

For example, the state of Pennsylvania is offering the COVID-19 Working Capital Access (CWCA) Program, administered by the Pennsylvania Industrial Development Authority. North Carolina launched a public/private partnership that provides loans through the North Carolina COVID-19 Rapid Recovery program. Michigan’s Economic Development Corporation created the Michigan Small Business Relief Program that provides up to $20 million in support for small businesses. The funding is divided between $10 million in small business grants and $10 million in small business loans.

Dig down into potential county and city funds, as well. Local chambers of commerce may be reliable sources.