President Trump recently signed a $2 trillion stimulus bill called the Coronavirus Aid, Relief and Economic Security (CARES Act).
The CARES Act provides for a Paycheck Protection Program with a forgivable clause for small businesses, including 501(c)(3) nonprofits, that maintain staffing through June 30, 2020.
Nonprofits can apply for operational funding equivalent to 2.5x their average monthly payroll expenses. As long as loan funds are used for qualified expenses (wages, benefits, rent, utilities etc.) – organizations can apply for and receive loan forgiveness. This, in essence, turns the loan into a general operating support grant.
As we await final details of this program (including application availability) there are steps you can take to prepare:
• Contact the banking institution that holds your accounts and ask if they will be participating in the Paycheck Protection SBA Loan Program. Inquire when applications will be available.
• Share information about this opportunity with board leadership and obtain support to proceed with a loan application.
• Prepare financial documentation including proof of expenses (payroll and benefits) and calculation of requested amount.
Updated April 27, 2020 - The Payroll Protection Program received additional funding and the Small Business Administration will resume accepting nonprofit PPP loan applications on Monday, April 27 at 10:30AM EDT from approved lenders on behalf of any eligible borrower.