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Ppp loans
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Posted 1/14/2021 11:18 (#8750430 - in reply to #8748914)
Subject: RE: Ppp loans

Southern MN

"Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant"

I am pretty uncertain about what is going to happen to the economy now do to Covid and changing regulations.  If attempting to weather these tough times results in carrying more debt on the operating line moving forward and interest rates spike due to economic changes from new regulations and interest goes from 4% to 15% it could compromise the ongoing operations of the farm.  Saying interest rates will the same in 2025 as today is all peachy and rosy, but a look back at the 70s/80s and one sees similarities to today that makes cheap interest in the future a very uncertain event.

Basically, my thoughts are due to the current economic situation carrying variable rate debt forward, as a result of 2020 losses, that can be converted to 1% fixed rate with a PPP loan from the SBA is foolish since it is unclear what interest rates are going to do.  Additionally, there are already talks of price increases in the steel, lumber, and oil which indicates inflation is coming and that means uncertainty in input costs.

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