Free Money! SBA Payroll Protection Program

Free Money! SBA Payroll Protection Program


Ross Williams

4/1/2020

Dear Treasurers and Finance Chairs (cc: to Pastors)
 
Information is beginning to become available on loans and grants for the “Paycheck Protection Program” issued by the Small Business Administration.  If done correctly, this Act can result in a grant equal to 2.5 months of payroll that does not need to be repaid!

Please see the information below as well as the attached files:

PPPOverview - Overview of the Paycheck Protection Program.

PPPFAQ - "Frequently Asked Questions" document on the Paycheck Protection Program.

SBAForm2483 - This is a sample of the form that you will be required to complete and submit to your bank.

I would recommend that churches apply for this loan and work to ensure that it becomes eligible for forgiveness.  Doing so will allow your church to protect the pay of your employees while not obligating your church to additional budget expenditures in the future.

Here are some key points:

  • You will need to submit the application through a bank that is an approved SBA lender.  Most major banks are.
  • You will need to prepare a list of all employees and sub-contractors whether full time or part time.  
  • You will need to determine the amount of the loan, which will be equal to 2.5 times the church's average monthly payroll.  
  • Although the loan amount is determined by payroll, you may spend the funds as follows: 
    1. Payroll costs
    2. Mortgage interest only - no principal
    3. Interest on debt incurred before 2-15-2020
    4. Rent
    5. Utilities
  • I would recommend that all churches work toward only applying for what can be spent in the next 8 weeks on the items above so that the loan is eligible for forgiveness, thus not placing a budget burden on your church going forward.  You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan.
  • These are unsecured loans, which means that no collateral is required and no one can be held liable for the loan unless the loan proceeds are used for an unauthorized purpose. 
  • There are other programs that are available but I would caution you to look closely at them.  For example, deferred payroll taxes MUST be paid at a later date.  If you cannot pay them now, economic decline may prevent you from paying them later.
  • You may not apply for this Paycheck Protection Program if you are applying for other SBA type loans.  Please be sure of this before you spend the time in preparing the loan package. 

Sincerely,

Ross

Files: pppfaq.pdf    pppoverview.pdf    sbaform2483.pdf