Paycheck Protection Program: Top 7 Takeaways for Ministries

The CARES Act economic stimulus package created a forgivable loan program in the wake of the COVID-19 crisis. Religious organizations are among those who may qualify for assistance. Here’s what you need to know about the Paycheck Protection Program, which is accepting applications through August 8, 2020.

Below are 7 quick takeaways about the small business loan program. Brotherhood Mutual encourages you to talk with your ministry’s financial institution/advisor or legal counsel for details.

1. The Paycheck Protection Program (PPP) offers relief to ministries. The aim of a PPP loan is to help small businesses and nonprofits retain workers, maintain payroll, and cover immediate expenses. Payments can be deferred for 6 months or forgiven altogether. Read more about the PPP here.  
2. Seek funds only from approved lenders. Start by asking your ministry's local bank or credit union if it will help you apply for a PPP loan. If unsuccessful there, explore ministry relationships with other participating lenders. Finally, consider alternative options, such as PayPal, Quicken Loans, Divvy,* or other online portals. Beware of any organization seeking an upfront payment to help you file for a PPP loan. Such offers are likely fraudulent.
3. Previous PPP applicants may need to apply again. If you applied for a PPP loan before June 30, 2020, ask whether your lender will resume processing your request or will require a new application.
4. Gather the information needed to request a PPP loan. This guide from the U.S. Chamber of Commerce provides information that can help you determine eligibility and prepare to file for a loan. You’ll need to document payroll costs and certify that you’ll use PPP loan funds only for approved purposes. These include:
   • Lease, rent, or utility payments.
   • Retaining/rehiring workers and maintaining payroll (salaries, full-time and part-time employee wages, independent contractor wages, benefits, state and local tax on employee compensation).
   • Expenses for social services programs.
   • Mortgage interest payments.
5. Open a separate banking account. To take advantage of the loan forgiveness provisions of the PPP program, recipients must detail how the funds were used. A dedicated account will make this easier to track.
6. Stick to the rules so they’ll work in your favor. 100% of the PPP loan is eligible for forgiveness if used according to the law. This is why it’s important to use the funds as directed and to keep good records. A separate account will streamline your eligibility report. Read what else is required when filing for PPP loan forgiveness.
7. Prepare to apply quickly. Congress has extended the application deadline for PPP loans until August 8, 2020. While about $129 billion worth of PPP funding remained on June 30, the program's original end date, it’s not enough to support every religious organization, nonprofit, and small business that may apply for a PPP loan.

* We do not endorse any particular service providers. This information is being offered as an additional option ministries may consider.

Updated July 6, 2020

The information provided in this article is intended to be helpful, but it does not constitute legal advice and is not a substitute for the advice from a licensed attorney in your area. We strongly encourage you to regularly consult with a local attorney as part of your risk management program.