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.

Nationally:

  • 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