Small Businesses & Non-Profits Loans Offered
Posted by [email protected] on Apr. 4, 2020 / Subscribe 0
CARES Act – Loans Available for Small Businesses and Non-Profits
On March 27 Congress passed the CARES Act, a COVID-19 relief package. One of the pieces included in the CARES Act is funding for loans to small businesses and non-profits to help them keep employees and maintain payroll during this time. The main part of the CARES Act which provides funding for loans to small businesses and non-profits is called the Paycheck Protection Program. The CARES Act authorized up to $349 billion in forgivable loans for the Paycheck Protection Program. A summary of this program put together by the Department of the Treasury can be found here.
The Paycheck Protection Program allows small businesses and non-profits to apply for loans of up to 2.5 times what their average monthly payroll costs were prior to the start of this crisis. The loan are used over a period of eight weeks to so that employee and payroll levels are maintained. All of the loan amounts used during this 8 week time period will be forgiven as long as they are used to cover payroll costs, employee benefits, mortgage interest, rent and utility costs. Any loan amounts left over after the eight weeks can either be repaid without any prepayment penalty or kept as a low interest loan.
The process to develop this program and put it into place has been developing rapidly. The application for these loans can be found here. The applications can start to be submitted as of Friday, April 3. You can file the application with any local bank that is an existing Small Business Administration lender or any other FDIC bank. As of now, you have until June 30, 2020 to apply for these funds.
Part of the distinction that is important here is to make clear that these loans, while processed through the Small Business Administration, are available to for-profit and non-profit entities alike. Further, while the Paycheck Protection Program is the main source of funding available to non-profits as provided within the CARES Act, there are also two other programs available or under development that non-profits should be able to access. There is an info sheet available here that gives an overview of how and why non-profits can access not only the Paycheck Protection Program but other these other funding options as well.
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