Coronavirus: Resources for Kansas City Nonprofits

Passed March 19

This bill includes a complex set of temporary paid leave mandates and employer reimbursement provisions, as well as funding for free coronavirus testing, food nutrition security, and Unemployment extension.

What the Families First Coronavirus Response Act Means to Nonprofits
National Council of Nonprofits

Families First Coronavirus Response Act: Summary for Nonprofits
Independent Sector

Passed April 24

Policy Alert: CARES Act Expansion Bill to Revitalize PPP and EIDL Loans
Nonprofit Connect

Passed March 27

This bill provides significant funding for businesses, hospitals, schools, and social support programs, among many other things.

Analysis of of the CARES Act
National Council of Nonprofits

Policy Alert: Federal Aid Package Provides Relief for Nonprofit Organizations
Nonprofit Connect

Loans Available for Nonprofits in the CARES Act
National Council of Nonprofits

CARES Act: How to Apply for Nonprofit Relief Funds
Independent Sector

Overview

All 501(c) private nonprofits are eligible (excluding religious institutions)

Can be used for payroll, sick leave, fixed debts, accounts payable, rent or mortgage payments, and other bills that can’t be paid because of the disaster’s impact.

2.75% interest rate for nonprofits

Loans up to $2 million available

*When applying for the loan, you can also ask for an Emergency Grant of up to $10,000 that does not have to be paid back, even if your application is later denied. (Section 1110(e)(5)). If you’ve already applied for a loan before the Emergency Grants were announced, you can go back and fill out the new, streamlined application to request the Grant, which will not impact the status or slow your existing application.

Application Deadline: December 21, 2020

How to Apply: SBA Application Online

Frequently Asked Questions: Economic Injury Disaster Loans

We are answering these questions based on guidance from the SBA Interim Final Rule, and guidance from our partners. All information is subject to change or be updated, and should not be viewed as legal advice. Please consult your attorney, advisor, or lender as you navigate your options.

What is the EIDL grant (or advance) and loan program?

• The SBA Economic Injury Disaster Loan is a low interest loan available to nonprofits and businesses impacted by COVID-19. Application available here. It can be used to pay for expenses that could have been met had the disaster not occurred, including payroll and operating expenses. The majority of this loan, excluding the exception of the grant listed below, is not forgivable and will need to be paid back.
• Through the same EIDL Loan application (linked above) you may apply for an EIDL grant (or advance), which does not need to be repaid under any circumstances. You may apply for $1,000 per employee, up to $10,000, and the loan is usually received within three days of completing the application.

How does the EIDL Grant or Advance impact my PPP application?

• If an organization is applying for a full EIDL loan and the advance and loan are being used for something different than the PPP, then that loan stands apart and is distinct from the PPP. If you only apply for the advance and not the full EIDL loan, the advance gets rolled into the PPP and the amount of the PPP gets reduced by the advance amount.

Overview

For nonprofits with 500 or fewer employees

Can be used to cover payroll costs (employee salaries, wages, commissions, tips, paid sick or medical leave), as well as insurance premiums, mortgage interest, rent, utilities, and interest on prior debt.

Loans can be up to 2.5 x the borrower's average monthly payroll costs, not to exceed $10 million.

Employers that maintain employment for the 8 weeks after origination of the loan, or re-hire by June 30, will have loans forgiven in whole or part, essentially turning the loan into a grant.

Application Deadline: Application must be process by an approved lender by June 30. (Applications open April 3.)

How to Apply: You must apply through an SBA-approved lender.

Frequently Asked Questions: Paycheck Protection Program Loan

We are answering these questions based on guidance from the SBA Interim Final Rule, Paycheck Protection Program FAQs and guidance from our partners. All information is subject to change or be updated, and should not be viewed as legal advice. Please consult your attorney, advisor, or lender as you navigate your options.

Who is eligible?

• 501 (c) (3) nonprofit organizations, 501 (c) (19) veterans’ organizations, and Tribal business described in section 31(b)(2) (c) that have fewer than 500 employees.

What is forgivable under the PPP?

• This can be up to the full principal amount of the loan and any accrued interest, if the borrower uses all the loan proceeds for forgivable purposes. Forgivable purposes include “payroll costs,” defined as:
  • If EIDL was used for payroll, your PPP must be used to refinance this grant. Up to $10,000 will be deducted from the loan forgiveness amount on the PPP loan.
  • Compensation to employees in the form of wages, salaries, commissions, or similar compensation.
  • Cash tips or equivalent.
  • Payment for vacation, parental, family, medical, or sick leave. However, this excludes qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the FFCRA.
  • Allowance for separations or dismissal.
  • Payment for the provision of employee benefits consisting of group health care coverage including insurance premiums, and retirement.
  • Payment of state and local taxes assessed on compensation of employees.
  • For independent contractors or sole proprietors: wage, commissions, income, or net earnings from self-employment or similar compensation.
  • Other costs including mortgage interest, rent, and utilities. But these may not be more than 25% of the total amount

What is not forgivable? A short list of specifically non-forgivable expenses is below, but is not all-encompassing:

• Any compensation of employee whose principal place of residence is outside of the US.
• Compensation of an individual employee in excess of an annual salary of $100,000 (prorates as necessary).
• Federal employment taxes imposed or withheld between Feb 15, 2020 and June 30, 2020, including employee and employer’s share of FICA and Railroad Retirement Act taxes, and income taxes required to be withheld from employees.
• Qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act.

My nonprofit is seasonal, and activity increases from April to June. Considering activity from that period would be a more accurate reflection of my business’s operations. However, we weren’t fully ramped up on February 15, 2020. Am I still eligible?

• Consult with your lender. They may be able to consider whether a seasonal borrower was in operation on February 15, 2020 or for an 8-week period between February 15, 2019 and June 30, 2019.

Can part-time employees be paid under PPP?

• Yes, if they are on payroll.

Can PPP be used for contractors?

• No, but if your contractor is a sole proprietor or independent contractor, they are eligible to apply for their own.

Do I need a lender to apply for a PPP Loan?

• Yes, you apply through an approved SBA Lender. Many banks are approved lenders. Reach out to your current bank or lender to apply.
  • Lenders are not required to participate in the PPP program and can set their own guidelines and limits for participation. Please consult your local lender for their process for submitting a PPP application.

What if I apply for the PPP and then an employee leaves for unrelated COVID-19 reasons?

• Your forgiveness amount will decrease by any amount not used to cover payroll expenses. So, if an employee leaves after you have applied, you do not use that funding and it is not forgiven, you will pay it right back. If you use it for other purposes, you will have to pay it back according to the terms outlined in the loan agreement with your lender.

If we keep employees on and paid during the 8 weeks we use the PPP, will any job attached lay-offs after that affect the eligibility for turning the loan into a grant?

• After the eight weeks, if you need to lay someone off, this will not impact your forgiveness agreement, as of March 31, 2020.

Can I apply for both EIDL and PPP?

• Yes, but you may not “double dip” to cover the same costs.

Helpful Links

PPP Application
Small Business Administration

Loan Calculator
Jewish Federation