Economic Help for Small Businesses and Nonprofits
Pastors and Church Leaders:
We are sharing this information in hopes that it benefits your church if you are in need of financial assistance. This is also very important information and links to share with anyone in your congregation who may be looking for help for their own small business. You are welcome to post the link to this information on your website.
Economic Injury Disaster Loans and Loan Advance
Small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000.
The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid. It appears that the SBA has removed the original full application process and replaced it with the Streamlined version.
NOTE: This is available for Independent Contractors as well
More information here: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources#section-header-2
Paycheck Protection Program
The Paycheck Protection Program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.
Funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
Must Keep Employees on the Payroll—or Rehire Quickly
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
All Small Businesses Eligible
Small businesses with 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors— are eligible. Businesses with more than 500 employees are eligible in certain industries.
Clarification that faith based organizations are eligible to participate in the PPP can be found here: https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-clarifies-eligibility-faith-based-organizations-participate-paycheck-protection-and-economic
When to Apply
Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10, 2020, independent contractors and self-employed individuals can apply. We encourage you to apply as quickly as you can because there is a funding cap.
How to Apply
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. All loans will have the same terms regardless of lender or borrower.
More information here: https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp
This article clarifies that independent contractors should not be included in your church's payroll calculations. It also give guidance on how to fill out a payroll protection program application: https://home.treasury.gov/system/files/136/PPP--IFRN%20FINAL.pdf?fbclid=IwAR2tPOnxuKSsKnPX-ZnbRkEFEss5_zbKiyzB3QQtK0bf7_DX9PjNkVgEBRo