The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated roughly $350 billion to help small businesses and nonprofitsduring the novel coronavirus crisis. Nonprofits are eligible for the Paycheck Protection Program and the Economic Injury Disaster Loan Program. The Paycheck Protection Program’s maximum loan amount is $10 million with a fixed 1% interest rate and maturity of two years. The Economic Injury Disaster Loan program provides qualifying small businesses and non-profits with working capital up to $2 million with low interest rates and terms extending up to 30 years. As of April 3rd, nonprofits can apply for loans through existing SBA lenders.
We know that this is a difficult time for all nonprofits and that applying to a new form of financial support in the midst of such chaos is overwhelming. We've compiled this list of resources that we hope will make applying for Small Business Administration loans feel a little less daunting.
Some Things to Consider
This is a first-come, first-serve opportunity. Applications for the Paycheck Protection Program will only be accepted until June 30th, 2020.There is a funding cap, appointments with lenders will fill up quickly, and there are reports of some banks not being prepared for the rush in applications. Apply early, be patient, but know that not all loans will be granted.
SBA will forgive the portion of loan proceeds used for payroll costs and other designated operating expenses for up to eight weeks if at least 75% of loan proceeds are used for payroll costs.
Non-profits only need to provide that they were in operation before the COVID-19 outbreak and show that they have paid payroll and payroll taxes. No cash flow projections or underwriting are needed
For those with fiscal sponsorship, your sponsor needs to submit the application, as the loans require proof of payroll payment. For those using ADP Payroll, the payroll report feature will be useful for writing quick applications.
For questions specific to your organization, contact theSBA regional office or an approved SBA lending institution. Here is a list of the top 10 SBA lenders by volume.
If you need help understanding these programs or completing the forms, schedule a FREE 1:1 consultation with Jitasa, an accounting firm that helps nonprofits with their bookkeeping, tax filings, and other services.
Faith-Based organizations are eligible to participate in the Paycheck Protection and Economic Injury Disaster Loan Programs without restrictions based on their religions identity or activities.
Emergency Loan Fact Sheets, Application Guides, & SBA Loan Comparisions
SBA Loan Application FAQ (Inner City Law Center)
Sample Board of Directors Resolution (Inner City Law Center)
Checklist for Nonprofits On Emergency Loans(Independent Sector)
Template for Board Resolution Authorizing Loan (docx) (FMA)
Script for talking to a Bank about PPP (docx) (FMA)
Comparison of PPP Loans and Economic Injury Disaster Loans (Jewish Federations of North America)
Chart Comparing Loans Available to Nonprofits(National Council of Nonprofits)
Webinars on SBA Emergency Loans For Nonprofits
Federal Coronavirus Relief Bills: What Do They Mean for Nonprofits? (National Council of Nonprofits)
Hosted by San Diego Grantmakers, Mission Driven Finance, and Small Business CDC
(April 2 2020)
Fact Sheets About CARES Act
Analysis of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (National Council of NonProfits)
Nonprofit Guide to the CARES Act(Seyfarth)
Small Business Owner’s Guide to the CARES Act (includes FAQs useful for nonprofits) (US Senate Committee on Small Business & Entrepreneurship)