Nonprofit Relief and the Payroll Protection Program
IMPORTANT: Applications regarding the CARES Act and the Payroll Protection Program open April 3rd. Applications received after this date may reduce chances of acceptance.
Official PPP Guidance
Information, Official Guidance and Guidelines for Approvals from The Atlantic District Legal Council
Watch the Meeting
Held on April 2nd, questions, answers and guidance for churches regarding the CARES act and Payroll Protection Program
The CARES Act was passed on March 27, 2020. The applications open on April 3, 2020. This is something you need to prepare for so you can apply. It may provide some needed relief in the midst of this uncertainty.
The most important part of the CARES Act is the Paycheck Protection Program (PPP). There are people working on the other parts of the Act to see how and if they apply to churches and others. It is unclear as of this writing. However, the PPP Loan does apply to churches, schools, and other social ministries. You cannot be slow to act. You want to have your application in at the beginning of this process as there may not be enough funds for everyone who applies.
The PPP is based on your average Payroll over a year.
You can apply from any existing Small Business Administration (SBA) lender. You should contact the bank you use for your checking. Let them know that you are intending to apply and make sure that they are participating. If they are not participating you need to contact a larger local bank that is participating.
Next you should work on your payroll spreadsheet. Vanderbloemen PPP Excel Spreadsheet
This is a resource from Vanderbloemen. The calculation includes: salary, housing allowance, state taxes, health, retirement, disability, state and local taxes. Federal taxes are not included in this amount. You can also include 1099 employees i.e. organist, worship band, etc… The max amount per employee is 100,000 per year. You need the average payroll costs for the last 12 months. You then multiply the average payroll costs by 2.5. This is your loan amount.
One of the keys with this Federal Loan is the forgiveness clause. As long as this loan is used for payroll, mortgage, and utilities the entire loan may be forgiven. It will depend on the number of Full Time Equivalents you currently have versus a specified time in 2019.
The vast majority of this loan should be forgiven. This is an opportunity to help you recover some of the costs associated with Covid-19.
This is an opportunity for your congregation. Your Constitution and Bylaws will determine what you must do to apply for a loan. This cannot wait. Contact your congregational leadership to determine how you will proceed. You should strive to make application on the day that the loans open which is April 3, 2020.
CARES Act and PPP
Explained by the US Chamber of Commerce