Action You Can Take Now on the CARES Act
Yesterday InterSector sat in on a CARES Act Overview (slides and recording here) from the Alliance for Strong Families and Communities.
Here are steps you can take now to explore and prepare.
Paycheck Protection Program (SBA 7a forgivable loans – cash available in a few weeks to NPs with 500 or fewer employees)
Steps you can take today
- Contact your local lender NOW to find out if they’re an SBA lender, to get guidance, and to “get on the list.” (Associated Bank, Nicolet Bank, US Bank, First Business Bank and Community First Credit Union are SBA lenders)
- Check SBA website regularly
- Use U.S. Chamber of Commerce checklist and calculator to determine eligibility (this illustrated guide helps, too)
- Be clear on rules for forgiveness, and plan to stick to them!
- Loans of up to 2.5x average monthly payroll expenses (max $10 million) will be available through local lenders, not the SBA itself.
- Max interest rate 4%; not known yet if it will be lower for NPs
- Process is not yet defined/available. May be ready by Friday, 4/3.
- There is no Medicaid exclusion on these loans, thanks to nonprofit advocacy.
- Forgiveness hinges on maintaining payroll March 1-June 30; reduction in payroll will reduce forgivable amount.
EIDL (available now, up to $2 million, for nonprofits with 500 or fewer employees)
You may be able to get both an EIDL and a PPP loan if you do not use them for the same purpose.
Here is the National Center of Nonprofits’ detailed comparison of PPP, EIDL and a Mid-Size Loan program for larger organizations.
- Apply online through SBA
- You can get a $10K cash advance within 3 days of applying; cash advance need not be repaid
- 2.75% interest rate
- Approval will take several weeks; you are able to apply now and refuse the loan but keep the cash advance.
Employee Retention Payroll Tax Credit
Eligible if not applying for Paycheck Protection Loan or EIDL. More detail here.
- Up to $5K per employee for nonprofits with 100 or fewer full-time employees
- Up to $5K per employee paid but unable to work for nonprofits with more than 100 employees
For self-funded nonprofits, half the cost of unemployment benefits paid to laid-off employees will be reimbursed