Looking for financial assistance?

We caught up with Bryan Brendle of the American Horse Council to discuss what financial resources are available to American equine business owners in need.

What financial programs do equine businesses qualify for?

Currently, there are two financial assistance programs offered by the U.S. government for equine business owners: the Paycheck Protection Program and Economic Injury Disaster Loan (EIDL)

“While we don’t yet have data to support which of the two Small Business Administration (SBA) loan programs have the higher success rate [regarding the loan application process],” said Brendle, “most of the discussion in the small business community focuses on the Paycheck Protection Program with its generous funding,” under the Coronavirus Aid, Relief and Economic Security (CARES) Act.

One obstacle that came up previously for the EIDL program was an exclusion for farming operations. Lawmakers, however, subsequently removed the exclusion, consistent with the goals of the horse industry and its allies.  

Which program should your horse businesses apply for?

Each program has different criteria. Brendle explained that local tack stores, for example, would likely benefit from Paycheck Protection while being eligible for EIDL. Boarding stables, if operating a payroll, should explore Paycheck Protection.

The CARES Act covers independent contractors and the self-employed, which means it should cover many trainers.

Given the diversity of business operations, individual owners should contact their bank or CPA to clarify their options and gather supporting documentation of their business entity classification, emphasized Brendle.

Where else can equine business owners turn?

Brendle noted that state unemployment offices are often underfunded, understaffed and not well-equipped to handle the current demand for their services.

“Under the CARES Act the IRS is offering flexibility for business owners that can alleviate financial pressures,” he said.

For instance, people who have Individual Retirement Accounts or use other qualifying retirement programs may take out up to $100,000 without penalty. Small businesses and the self-employed can defer the employer portion of the social security tax in two installments, one due at the end of 2021, the other the end of 2022.

The US Department of the Treasury has also moved ‘tax day’ to July 15.

Equine business owners should consult their bank to expedite the application process, he said.

“The horse industry and small business owners,” said Brendle, “will continue to receive clarification of eligibility requirements and hopefully [have] smoother application processes moving forward.”

He noted that the US Treasury and SBA are issuing documents clarifying ambiguities and that lawmakers are working to address issues in other COVID-19 legislative vehicles.

*Guidance in this post should not be construed as professional advice.