How the new PPP loan and other resources can save you and your church during this Pandemic

The Paycheck Protection Loan Program (PPP) in the CARES ACT (see below) provides loans to small businesses and any organization exempt from income tax under IRS Section 501(c)3, and with less than 500 employees. That includes your local church, diocese or non-profit. The PPP loans may be used to cover payroll costs (salary, wages, group health care and other qualified benefits) to qualified employees who serve at your church or non-profit. This includes those who serve full-time, part-time and qualified self-employed (clergy) with individual annual earnings of less than $100,000. This is not a special subsidy for religious organizations. Its neutral purpose is to keep people employed and thereby stimulate economic recovery.

Up to 100% of the PPP proceeds over the 8 week period of the loan may be forgiven depending on two factors—how many employees are retained and the extent of any salary reductions. Loan forgiveness also requires an application and proper documentation.  This is a complex loan program, therefore you should expect lenders to be without many answers for several weeks as the application process is designed. Forms are created and regulations and other guidance are created. We will provide updates as they become available

In the meantime, if you think your church, diocese or non-profit may benefit from a PPP loan, there are several things you can do now:

  1. Begin a dialog with your bank regarding the application process
  2. Begin to accumulate the payroll information necessary to determine the maximum loan amount
  3. Prepare a forecast of amounts you will spend on payroll costs for the eight weeks following the origination of the loan

Canon Phil Ashey

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