CARES Act offers new hope for cash-strapped nonprofits
On March 27, the Coronavirus Aid, Relief, and Economic Security (CARES) Paycheck Protection Program (PPC) This $349 billion loan program (administered by the Small If you receive a loan through the program, proceeds may be used You can’t Perhaps the most reassuring aspect of PPC loans is that they can Industry Stabilization Fund (ISF) Nonprofits with more than 500 employees, such as hospitals and Unlike PPP loans, ISF loans won’t be forgiven. However, you Immediate help If you’d like to apply for financial assistance under the CARES
Act was signed into law. How is this massive $2 trillion recovery package
poised to help your not-for-profit organization? It depends on your group’s
size, financial condition and other factors. But most nonprofits affected by
the coronavirus (COVID-19) outbreak are eligible for some relief under the
CARES Act.
Business Administration) is intended to help U.S. employers, including
nonprofits, keep workers on their payrolls. To potentially qualify, you must be
a 501(c)(3) or 501(c)(19) organization with less than 500 full- or part-time
employees. PPC loans can be as large as $10 million. But most
organizations will receive smaller amounts — usually equal to 2.5 times their
average monthly payroll costs.
only for paying certain expenses, including:
use these loans to pay your mortgage principal or to prepay mortgage interest.
be forgiven — so long as you follow the rules. To have your full loan amount
forgiven (except for loan interest), you must retain employees and not reduce
their regular salary or wages more than 25%. If you’ve already laid off
staffers, rehiring them by June 30 may enable you to qualify for full loan
forgiveness.
educational institutions, may be eligible for ISF low-interest loans. When
applying for one, you’ll be required to certify (among other things) that loan
proceeds will be used to retain (or rehire) at least 90% of your workforce at
full pay and benefits through at least September 30.
aren’t required to pay principal or interest for at least the first six months
after receiving an ISF loan. There’s a 2% interest-rate cap on these loans.
Act, talk directly to your bank. And contact us for help navigating the many
provisions of recent legislation — including other lending programs, emergency
grants and new payroll tax breaks.