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Timely Financial Assistance Opportunities from the CARES Act

These are difficult times, and we are thinking of our grantee partners. As you know, the President recently signed the $2 trillion coronavirus relief bill, known as the CARES Act. With it, come two opportunities which may be helpful to you. We know you are likely seeing countless messages right now, so we want to tell you up front what is in this message. Included below is valuable information on:

  1. Payroll loans, much of which are forgivable if you keep staff on payroll during the loan period.
  2. Loans to overcome loss in revenue.

If these would be valuable to your organization, we suggest you apply before funds run out.

For additional information, you might also see this recent piece in the Chronicle of Philanthropy on aspects of the stimulus bill pertinent to nonprofits.

1. SBA 7(a) Paycheck Protection Program
  • Under the CARES Act stimulus bill, nonprofits (and small businesses) with fewer than 500 employees are eligible for loans up to $10M to meet payroll and associated costs.
  • Much of the loan is forgivable if the organization keeps staff on payroll during the loan period.
  • An organization can access up to 2.5 months of payroll expenses in loans.
  • The total loan fund is expected to be $349B, and loans will be given out on a first-come, first-served basis, with an estimated 4 million eligible organizations.


– Eligibility: 501(c)3 nonprofits with 500 or fewer employees are eligible, regardless of whether the organization qualifies as a small   business under the normal SBA standards. Recipients do not have to certify that they are unable to obtain credit elsewhere.

– Permitted Uses: Payroll support (up to $100K per person), benefits, paid sick leave, mortgage payments, rent payments, and debt servicing.

– Loan Period: Loans are intended to cover expenses incurred during the period from February 15, 2020 to June 30, 2020,

– Terms: Maximum interest rate of 4% and a maximum repayment term of 10 years; principal and interest are deferred for up to a year and all borrower fees are waived.

– Loan Forgiveness: Nonprofits are eligible for loan forgiveness for the amount spent during the first 8 weeks of the loan on payroll costs, interest payment on mortgage, rent, and utilities. The portion of these expenses that is eligible for forgiveness depends on the percentage by which an organization reduced FTE staff and/or salaries (relative to a comparable period in 2019). The specific mechanics of this comparison are not yet defined.

2. SBA Economic Injury Disaster Loans
  • Loans offering up to $2M in assistance are also now available to nonprofits to help overcome temporary loss in revenue caused by COVID-19.
  • The interest rate is 2.75%, with repayment terms of up to 30 years.
  • This program does not include a loan forgiveness provision, unlike the 7(a) program.
  • Organizations cannot receive both this and the 7(a) loan, unless the loan applications are for different purposes.
  • Permitted Uses: Loans may be used to cover accounts payable, debts, payroll and other bills the coronavirus has affected your ability to pay.
  • Applications, and additional details, are already available online here.
  • Call the SBA Disaster Assistance Customer Service Center at 1-800-659-2955 if you need help with your application.