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COVID-19 RELIEF OPTIONS FOR NONPROFITS - WHAT YOU SHOULD KNOW

COVID-19 RELIEF OPTIONS FOR NONPROFITS - WHAT YOU SHOULD KNOW

With the passing of the CARES Act last Friday, relief programs are already underway. Federal and State websites are being updated numerous times a day. Options to investigate include:

The SBA Paycheck Protection Program (PPP): The purpose of this loan is to help retain employees at the current pay. Key items of the program are:

  • Available to businesses with less than 500 employees
  • The loan is available for payroll costs, mortgage interest, rent payments, and utility payments
  • The loan may be eligible to be forgiven
  • No personal guarantee required
  • A sample application is available here
  • Application process will be lending institutions approved to participate in the SBA loan program
  • Lenders may begin processing loans on April 3, 2020

SBA Economic Injury Disaster Loan (EIDL):

  • Loans are up to $2 million
  • Can be approved by the SBA based solely on applicant’s credit score
  • EIDL smaller than $200,000 can be approved without a personal guarantee
  • Borrowers can receive $10,000 in an emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll, mortgage or lease payments. If organizations also receive funding under the PPP loan, the PPP forgiveness portion will be reduced by this amount.
  • Application process is online through the SBA website 

FEMA: Many nonprofits may be eligible to apply for FEMA assistance, allowing for reimbursement of costs incurred related to the COVID-19 emergency:

  • Costs must be COVID-19 related and cannot be already covered by another grant program
  • Make sure you declare an emergency so that you can execute emergency procurements. If you do not already have a policy dictating circumstances that allow you to execute an emergency procurement, you should consider adopting one. An example of such a policy is as follows:
    Emergency procurement will only be considered when a threat to public health, welfare, or safety exists. Under no circumstances will poor planning be considered an “emergency.” A minimum of two (2) bids will be obtained through telephone, fax, or electronic mail. An Emergency Contract Certification form will be completed by the contracting officer, approved by an appropriate management level executive, and attached to the contract for legal review and approval
  • Costs may be both payroll and non-payroll related and include things such as:
    Disinfection of office spaces
    Costs associated with remote access for employees
    Other costs associated with “keeping employees employed”
    Proper documentation and tracking should start now to ensure all eligible costs are captured. Keep a separate file with copies of any documentation.

 

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