[UPDATE: November 16, 2020]

There have been no new loan programs authorized by Congress since late last spring – or any other financial assistance. The House of Representative’s HEROES Act, passed in mid-May on a party-line vote, has been languishing on the Senate Majority Leader’s desk since then.  

The Federal Reserve Bank, though, expanded its Main Street Lending Program to certain large nonprofits. 


[UPDATE: June 9, 2020]

The CARES Act was a helpful attempt to assist various sectors including nonprofits, but the chaotic roll-out and serious under-funding of the Paycheck Protection Program (PPP) – in particular – was disappointing. During April, Congress acted to replenish that fund but – again – it continued to be plagued by inconsistent rules and guidelines.

By late May, the House had passed a bill which includes significant fixes to the PPP. Several days later, the Senate approved the changes to the popular Paycheck Protection Program, and that legislation was signed into law. “The bill provides borrowers with additional flexibility and time to use PPP loan funds and still have the loan forgiven.”


[April 3, 2020]

The CARES Act was passed by Congress on March 27th, 2020 “provides numerous opportunities for existing nonprofit and tax-exempt organizations to reduce the stress that COVID-19 may cause on their finances, whether through loans, grants, or tax credits.”

The Small Business Administration’s website includes a full description of all of the possible types of aid and relief for small businesses – which expressly includes nonprofits. This category means entities with fewer than 500 employees. For large businesses and nonprofits, there is slightly different relief.

In particular, the CARES Act provides two types of loans.

The Paycheck Protection Program (PPP) is a loan up to $10 million which is forgivable in certain circumstances. There is no security or collateral required. Though the PPP is managed by the SBA, applicants must apply through SBA approved banks. Beginning April 3, 2020, the loans are considered on a first come, first serve basis. But these lenders report they are not yet prepared to process applications but – by mid-morning on the first day – they were already swamped with them.)

The Emergency Economic Injury Disaster Loans (EIDL) are also available without security or collateral. Amounts can be up to $2 million, but they are NOT forgivable. Applications are made directly to the SBA. )

FPLG is currently assisting clients to navigate and understand these programs, and to complete applications for both the PPP and the EIDL.

Contact FPLG (619) 780.3839

Nonprofit organizations [with PPP loans] were required to make a good faith certification … that economic uncertainty made the loan request necessary to support ongoing operations. Now the SBA has created a questionnaire it is using to gather information to assess the validity of the good faith certification made by nonprofit organizations.

— CapinCrouse LLP (10/30/20)

…[R]eports on the impact of the government’s previous efforts vary widely, with some charities hailing the Paycheck Protection Program as a financial savior, while other say it provided only a brief respite from layoffs and other cost-cutting measures.

— Dan Parks (7/21/20)

The new 60% statutory requirement, which replaced the 75% requirement, will not be a cliff, meaning that if a borrower spends less than 60% of the PPP loan amount for expenses that otherwise would be forgivable … during the 8 or 24 week testing period, then that borrower will get some forgiveness, instead of no forgiveness. While we do not believe that the SBA or Treasury Department have the authority to change the statute in this way, this is a welcome move towards what we expect the next iteration of the law to say, or for the SBA to follow, as a welcome change.

Alan Gassman (6/8/20)

We here at NPQ are pretty darned sure that the fourteenth set of Interim Final Rules for the Paycheck Protection Program (PPP)—issued last Friday by the Small Business Administration (SBA) and Treasury Department as a dense, 18-page Memorial Day gift to financial advisors and managers—is no more final than the prior thirteen sets of Interim Final Rules, which weighed in at 26 pages. The word “final” apparently means little in this context,…

— Ruth McCambridge et al, (5/27/20)

If PPP has a fundamental flaw, it might be the premise that the worst economic damage will be over by the end of the second quarter — June 30, the program’s expiration date — and that companies thus would need only about eight weeks’ worth of cash to survive.

— The Editorial Board, The Washington Post (4/26/20)


GO TO – rapid-response funds

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UPDATE: The CARES Act and Nonprofits

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What a difference a week makes. Last week, the news media focused on the minutiae of the primary-election horse race. This week, Americans have been forced to confront the coronavirus (COVID-19) pandemic. For the nonprofit sector, the emergency becomes a double-barreled crisis: we are both victims and saviors. This is not an unfamiliar conundrum; there are frequent natural disasters that devastate one area or another. This nation’s charitable organizations - and, in particular, the social [...]

Funders Must Step Up – Right Now!

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Small Business Association Disaster Loan Guidance and Resources

The U.S. Small Business Administration (SBA) has an existing program, the Economic Injury Disaster Loan program, that extends disaster relief loans to small businesses, including nonprofits, to help alleviate economic injury caused by disasters.  On Thursday, March 12, 2020, the SBA announced that the program will be available to claims arising from COVID-19.  The SBA will work with state officials to offer loans of up to $2 million.  “These loans may be used to pay [...]

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