SBA Paycheck Protection Program – Consider Immediate Action
We want to make sure you’re aware of a time-critical program going live on Friday, April 3rd that requires your prompt attention. As part of the Federal COVID-19 pandemic relief CARES legislation, the Small Business Administration (SBA) is offering financial support to most nonprofits. While formally a small-business loan, organizations who obey guidelines can have the loan forgiven (converted to a grant) after eight weeks. The funds can be used for payroll and (with limitations) rent/mortgage and utilities costs.
There is a limit to the total funds available (2.5 months payroll costs) and applications will be processed on a first-come, first-served basis. Therefore, it’s important for organizations who choose to apply to get ‘in line’ with a bank and prepare on Thursday to make an application on Friday or as soon as possible.
What you need to do to apply:
- Choose a participating bank or credit union where you will apply. Learn how their application process will work. For many participating institutions, the application process should be online. Many participating banks and credit unions will give priority to existing banking customers, so it’s best to start by contacting your current bank or credit union to see if they will be offering SBA PPP Loans.
- Complete an application form – here is a sample.
- Prepare documentation of payroll costs for 2019. For now, prepare a payroll report for 2019 showing total wages, taxes, and unemployment costs for the year, per employee.
- Prepare documentation that your organization was operating and paying employee wages on 2/15/2020. For now, prepare a payroll report for the period including this date employees and wages.
- Gather your last two years of 990s or approved extensions, if you have them.
- Apply online starting Friday, April 3rd. While the program is open until June, there is a cap on funds and loans will be awarded on a first-come, first-served basis, so early applications are more likely to be approved.
View the Coronavirus Emergency Loans Guide and Checklist for Small Businesses and Nonprofits by the US Chamber of Commerce.