All organizations including nonprofits must state that due to the current crisis they need these loans in order to continue existing. To do so you, must check the box on the application form stating such.
Yes! The initial guidance from the government on this topic was contradictory, so they’ve clarified that organizations can take out both loans if they are spent on different categories of expenses. However, discuss with your CFO to strategize!
PPP, or Paycheck Protection Program, loans are loans that your organization will not have to pay back if followed correctly. PPP can only be spent on a few very specific categories, mainly relating to payroll, rent, and utilities, though at least 75% must be spent on payroll (for more details, see the official SBA website). Only organizations with fewer than 500 employees can qualify for PPP. If you don’t document where you spent the money, or you spent it in a non-approved category, it converts to a loan and you will have to pay it back.
Nonprofits with fewer than 500 staff may apply for PPP loans from any lender that has approval to issue them. The bank your organization uses will likely be your best bet, but if they are not approved to issue them, use SBA’s Lender Match online tool to find a lender. Your local Small Business Development Center will be able to answer more specific questions.
Applications are open until June 30, 2020.
No, you cannot. Only employees.
No, you cannot use PPP loans to pay staff classified as independent contractors (1099). The guidance states that they should apply for their own PPP, considering they are technically their own business.
No, you just need to keep the same headcount (or FTE count).
Use the last 12 months’ worth of payroll costs to calculate your PPP loan amount.
EIDL, or Economic Industry Disaster Loans, are low-interest loans that nonprofits can use to cover rent and payroll, as well as materials, mortgages, and other outstanding debt. Most of these loans for nonprofits are very favorable, with less than 3% interest rates and ~30 year payback periods.
Unlike PPP, nonprofits of any size can take advantage of EIDL. However, only private nonprofits are eligible for EIDL loans.
No application due date besides 2020 has been stated. To apply for EIDL, complete the application here.
No. Economic Industry Disaster Loans are loans, and they must be paid back. However, they have very low interest rates (less than 3% for nonprofits) and long payment periods.
Nonprofits may defer their payment of the employer share of Social Security taxes (6.2% of an employee wages.) All nonprofits can participate, and there is no limit on how many employees can take the deferral.
Half of the deferred taxes must be paid by the end of 2021, and the other half by the end of 2022.
Note: If your nonprofit has had any loans forgiven under the Paycheck Protection Program, payroll taxes may not be deferred.
For nonprofits, it is 2.75% over 30 years. For businesses, it is 3.75% over 30 years. First payment doesn’t have to start until January 2021.
Yes! There are a couple more.
