Applying for SBA Loans?

Posted By: Benjamin Bullock Covid-19 Response,

NOTE: This information is based on our best understanding, but cannot be relied upon as legal advice. Please confirm this information with your loan officer, financial advisor, or attorney.

May 26 Update: In the new guidance issued by SBA, it seems that EIDL Advances are now deducted from the forgivable amount. :(

April 24 UPDATE:  The SBA will resume accepting Paycheck Protection Program applications from participating lenders Monday, April 27, 2020 at 10:30am EDT. Call your financial institution. 

SBA Issued updated FAQ.

 The answers to two of the FAQs are particularly relevant for nonprofits applying for PPP loans:
  1. Payments to independent contractors do not count as payroll expenses for organizations seeking PPP loans since these contractors may apply for PPP loans on their own.
  2. Organizations seeking PPP loans should carefully consider the required certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant” and should have clear documentation for why the PPP loan is necessary for their organization.

April 23 UPDATE: CommunityWorks Carolina has a great "how to" video! 

April 21 UPDATE: 

Interim funding bill (H.R. 266) passed the Senate by voice vote April 21. Passage in the House this week is expected, but not a foregone conclusion. Representatives are being asked (not ordered) to return to DC to vote on the bill on Thursday. The President has said he will sign the bill. 

  • The bill provides a total of $484 in new spending, including $310 billion in new money for the Paycheck Protection Program.
    • $60 billion of that amount is earmarked for smaller lenders.
    • Half ($30 billion) will go to community development financial institutions (CDFIs), and to small lenders with less than $10 billion in assets.
  • The bill also adds $50 billion more to the Economic Injury Disaster Loan (EIDL) program, as well as $10 billion to the EIDL emergency grants program.


There are two Federal Loan programs that Nonprofits can apply for right now. They are not mutually exclusive, and both can be applied for. Here's a quick comparison from the National Council of Nonprofits.

About rolling the two loans together: There's a bit of confusion on this point. EIDL loans have to be rolled into the PPP application IF AND ONLY if they were made Jan. 31, 2020 and April 3, 2020. This is stated in the SBA Interim Rule, bottom of page 8 (see link below)

COVID-19 Economic Injury Disaster Loan (EIDL)

Apply Here

This is quick and simple form to apply for the EIDL, with an advance of $1,000 per employee, up to $10K max(New info as of 4/8), few questions asked. This advance does not have to be repaid, even if you are denied the regular EIDL.

This Application Form takes very little time to fill out, and you should not take too long, because you can’t save it and come back, and if you dawdle in the middle of it, the form will time out and you will have to start over.

Info you need:

  • You should go into your accounting software and pull a report called “Statement of Activities” (also called “Profit and Loss”) and set the dates for Feb. 1, 2019 to January 31, 2020, and on a Cash Basis.

Section 1 -Disclosures and Eligibility Verification.

This section asks two questions, the first asks you what type of eligible applicant you are (Section 501 nonprofits are the last option). The second question asks you to certify that all of the statements are true. If you cannot check all of the boxes, the you are not eligible to apply.

Section 2 – Business Information

This section asks for info about your organization. It’s mostly pretty standard questions. Here’s some of the trickier ones:

  • Organization Types – Nonprofits should choose “Other” and say “yes” to the next question.
  • Franchise – Few nonprofits would say yes to this.
  • Gross Revenues – This is “Total Revenue” on your Statement of Activities.
  • Cost of Goods Sold – This is not something many nonprofits have to worry about, so if you don’t know what this is, it’s probably 0. (This is the cost of procuring and producing goods that you sell)
  • Nonprofit Cost of Operation – This is the “Total Expenses” on your Statement of Activities. Nonprofit folks might think this means “Operating Expenses”, but in this case, it’s total. Again, SBA is used to dealing with small businesses where all costs are operating costs.
  • Combined Annual Operating Expenses… for All Secular Social Services Provided by the Faith Based Entity – If your organization does not engage in religious activities, you can ignore this. If it does, then only count expenses related to providing services, not to purely religious activity.
  • Compensation From Other Sources Received as a Result of the Disaster – Chances are high that this is your first stop, so you probably don’t have anything else yet.
  • Current Ownership since: Will be the same as “Date Business Established”, since Nonprofits never change “owners”.
  • Business Activity: Pick the one that makes the most sense, likely “Miscellaneous Services”. (Disappointing, I know)
  • Detailed Business Activity: This field is dependent on what you selected above. If you selected “Miscellaneous”, then you’ll probably also pick “None of the Above” here.

Section 3 – Business Owners Information

Are you owned by a business entity? Nonprofits, except for certain private foundations, are not.

Regarding “Owner/Agent” information, the current consensus of information we are receiving indicates that Nonprofits should enter N/A or "Nonprofit". For SSN, enter the org's EIN. You should still enter the contact email here, as this is where they will send followup questions.

Section 4 - Is pretty self-explanatory

Review and Submit the Application

Before you submit, be sure to save a copy of the review page because you won't get a copy. When you submit it, you’ll get a confirmation number (save this number). There won't be a confirmation email. If they have any questions, they’ll email you. That’s it! There's no reason not to apply!

Following up with SBA

We have been told you can email the SBA at to receive an update. You will need to provide your confirmation number.  We have however, not received a reply to our email, as of April 10th. Nor have we received the funds deposited in our account within three days as promised. 

The Paycheck Protection Program (PPP)

This second loan program is much larger and focused on covering Payroll Expenses. You’ll need to apply online through an SBA-approved financial institution (list below). If your current bank is SBA approved, then you’ll want to work with them, as many will be giving priority to current customers over new customers.

What’s important to note here is that this IS a loan, but one in which the principal and interest accrued will be forgiven (as long as the money is spent appropriately).

Our friends at the Greenville Partnership for Philanthropy have done an excellent writeup on it.

Example Application Form (as of 4/3/20)

SBA Interim Rules and Q&A

Info you need beforehand:

  1. You need to calculate your “Average Monthly Payroll”. Include:
    • W-2 Employee salaries and wages (for employees whose salaries are over $100K, subtract amount over $100K. Don’t include employees who don’t live in US, or independent contractors)
    • Payment for vacation, parental, family, medical, or sick leave, except that for which you’re getting credits through section 7001 and 7003 of the Families First Coronavirus Response Act;
    • Allowance for separation or dismissal (severance pay);
    • Cost of employee benefits consisting of group health care coverage, including insurance premiums, and retirement;
    • State and local taxes assessed on compensation of employees (NOT FEDERAL FICA Taxes!);
    • Figure out the annual value of the above, and divide by 12. This is your Average Monthly Payroll for the Application.
    • Multiply that amount by 2.5. That’s the maximum for which you can apply.
  2. Backup documentation for the lender. Your last 990 and audited financial statements. If you use a PEO or Payroll processor, their itemized invoices/reports should help, as well. Your bank's application will tell you what documents they need.

Let's say you have 4 W-2 Employees:

  • Alice Applebaum (executive director) makes $105,000 annually.
  • Bruce Bigsby (finance manager) makes $55,000
  • Catherine Courtwright (program director) also makes $55,000
  • Daniel Dolittle (admin coordinator) makes $35,000

Your total salaries are $250,000. BUT - Alice make more than the limit, so you have to subtract the overage. So 250K minus 5K is $245K.

You offer health insurance and other benefits for these folks which runs you about $20K/year.

That brings your total to $265,000.

(There are other costs you can add in, see the SBA rules and ask your payroll processor or bookkeeper if they apply)

So then you divide that total by 12 months and get $22,083.33.

This loan is intended to cover two month's payroll, and a little extra for rent and utilities, so multiply that monthly payroll expense by 2.5 and get $55,208.33.

$55,208.33 is the max you can apply for.

The Ownership Question: It asks for owners with more than 20% share. Leave it blank. If the form won't let you leave blank, list your nonprofit as the 100% owner using its address and EIN number.  

Forgiveness: During the 8-week period following the award of the loan, as long as at least 75% of the loan amount is used to cover payroll and the remaining portion is used to cover rent, utilities, and mortgage interest. If your rent, utilities, and mortgage interest is less than half a month’s payroll, then you may wish to reduce your loan request to cover two month’s payroll and two months of those costs. Any money that has not been spent on the above purposes must be paid back as a loan.

Applying Through Your Bank's Website (Deadline is June but should be extended to September):

Check your bank’s website to see if they are accepting PPP applications. Many banks will have online applications.

Download List of SBA-approved Banks in SC

Together SC Business Partners Member Banks offering PPP Loans. Some may not have their applications up yet, but should soon:

Other Banks working with Nonprofits:

Nonprofits who can help!

CommunityWorks is a nonprofit certified Community Development Financial Institution (CDFI) that supports affordable housing, small business development, and financial stability for underserved households and communities. Through education, lending, and investing, CommunityWorks can help small businesses and nonprofits in the midst of the COVID-19 crisis. We can provide personalized business coaching and help guide you through applying for federal and state relief funding, including the CARES act.

Please share with the National Council of Nonprofits your experience applying for a Paycheck Protection Program loan.

Federal Agencies Offer Further Guidance on Paycheck Protection Program - April 8th
Nonprofits are encouraged to apply for PPP loans as soon as possible. Although the deadline is June 30, the CARES Act only authorized a total of $349 billion in Payroll Protection Act loans, and financial experts suggest that this funding could run out soon. It is possible that Congress will appropriate additional funding for PPP loans, but a proposal to provide another $250 billion in immediate funding stalled in the U.S. Senate yesterday.
On Wednesday, the U.S. Treasury Department published updated FAQs on the PPP. Last week, the Small Business Administration (SBA) issued interim regulations. This guidance provides clarification on many questions nonprofits have been asking about the PPP. For example, the Treasury FAQs explain that organizations with more than 500 employees may still be eligible for PPP loans if they meet the SBA’s size standards for their industry. The interim regulations clarify that borrowers may only use up to 25% of the forgivable portion of a loan for non-payroll expenses.
Charitable nonprofits with fewer than 500 employees that are struggling to maintain operations during the COVID-19 pandemic also can apply for the low-interest emergency SBA Economic Injury Disaster Loan (EIDL), which is not forgivable but carries a 2.75% interest rate and long-term financing options. Nonprofits can apply for EIDL loans directly through the SBA. As part of the applications, nonprofits also may request an Emergency Economic Injury Grant of up to $10,000. If approved, these grant funds are available within a few days of the application, even if the organization ultimately does not qualify for an EIDL loan. Applicants for the EIDL this week have reported that SBA is now limiting these grants to $1,000 per employee (for a maximum of $10,000). Nonprofits may apply for both Paycheck Protection Act and EIDL loans (and are encouraged to apply for both as soon as possible) but may not use both loans to cover the same expenses.
To help your nonprofit understand which of these loan programs is the best option to help maintain your operations and payroll during the COVID-19 crisis, check out the comparison chart from the National Council of Nonprofits.
April 15, 2020

The SBA released updated loan approval numbers through April 13th for the Paycheck Protection Program (PPP), which first became available to businesses on April 3rd, 2020.


  • Approval of 1,035,086 loans
  • Approval of $247.5 billion in loans
  • 4,664 lenders have processed approved loans
  • Overall average loan size is $239,152
  • Top five sectors receiving loans:
    • Construction (13.73%)
    • Professional, Scientific, and Technical Services (12.26%)
    • Manufacturing (12.25%)
    • Health Care and Social Assistance (11.27%)
    • Accommodation and Food Services (9.18%)

In South Carolina:

  • Approval of 14,273 loans have been approved
  • Approval of $2.76 billion in loans