Quick Steps: Get CARES Act Assistance for Your Church
The last few weeks have been an incredible time for churches—navigating change, leading with love, and delivering a message of hope for those seeking clarity in this unprecedented time. We have seen a digital transformation for many, and have been inspired by the creativity of pastors and congregations across the world. While physical doors have been closed for worship, churches continue to spread the Word and reach people where they are. Fellowship and connection is not confined within the four walls of the church, and that has never been more apparent as it is today.
However, churches across the nation are battling their own reality as the spread of COVID-19 continues to impact operations. Many have already been faced with layoffs or have made the tough decision to furlough staff. And for some states, including Michigan, employees of churches or religious groups are not eligible for unemployment.
Last week, the President signed into action the “Coronavirus Aid, Relief, and Economic Security Act” or the CARES Act, which is the biggest economic relief package in American history. The great news is, churches qualify for assistance under the CARES Act’s Paycheck Protection program! However, there is a need to move quickly. While $349 billion is a lot of money, and will help many 501(c)(3)s and small businesses—how far will that really go? According to Sutton Turner at Vanderbloemen, not far.
We hope you take advantage of the opportunity so your church can get the assistance it needs to continue ministry programs during these unprecedented times. Below are some resources, and a link to a step-by-step checklist to help you prepare immediately so you can receive loan assistance as quickly as possible. Know that the below information and guidance is current as of April 8, 2020.
Research the CARES Act
Before you start the process, take a look at the below resources to help you quickly understand the CARES Act in more detail. This is a great place to start, as some focus specifically on how assistance pertains to the Church:
- Download the CARES Act Checklist for Churches
- View the blog videos from Vanderbloemen
- Churches & Non-Profits, $350B will go FAST! By Sutton Turner
- Download the SBA Paycheck Protection PLan (PPP) sample application
- Download Sutton Turner’s Slides Here
- CARES Act Overview from Whitley Penn
- Small Business Guide to the CARES Act from Ernst & Young
- Read Bill Here
Consult legal and financial counsel
Connect with your legal counsel and financial advisors to determine the applicability of the CARES Act to your organization and confirm the right steps to ensure your application and documentation are prepared correctly. If you do not have legal or financial support on retainer, reach out to your congregation to see if anyone in your community is a lawyer and can provide assistance. Other options to explore are The Church Lawyers or the Alliance Defending Freedom, Church Alliance. In addition, worth keeping up to date with the ChurchLaw&Tax resources.
Collect documentation in advance
Assistance provides loans to help from February 15, 2020 to June 30, 2020. Funds can be used to provide assistance for:
- Payroll costs: salaries/wages, retirement benefits, state and local taxes and vacation earned, group health insurance benefits, including paid sick/parental leave, medical and insurance premiums
- Mortgage interest payments (but not principal) or rent payments. Note that housing allowances are not included in payroll costs.
- Interest on any other debt obligations that were incurred before the loan period. Details here are still being defined by the SBA.
We recommend starting a spreadsheet. View an example from Vanderbloemen on how to build a spreadsheet. You will need to include payroll costs for the preceding 12 months prior to the date on which the loan is made. Separate these out month-by-month. For a full breakdown of other items to include, download the CARES Act checklist.
Contact your local or regional bank-
The first step in the actual application process is to ensure your bank is participating in the CARES Act’s Paycheck Protection Program or public-private partnership (PPP) being administered by the Small Business Administration. You can call your bank or find SBA-approved lenders in your area through SBA’s online Lender Match tool. In addition, you can call your local Small Business Development Center or Women’s Business Center and they will provide free assistance and guide you to lenders.
Many lenders are not yet accepting PPP applications, and they have until April 11 to do so. However, some lenders are gearing up portals to get applicants going, so having a jump-start on documentation will help get the process going.
Be aware of possible coverage limitations
While $349 billion is a considerable amount of money, there is also a considerable need. We can not stress enough how important it is to prioritize and put urgency around the application process for your church.
According to the CARES Act, it is possible (perhaps likely) that not every eligible recipient will receive the maximum loan amount. Also, the CARES Act contains language that may imply that small business concerns in underserved and rural markets, including veterans and military, or those owned and controlled by socially and economically disadvantaged individuals, women, and businesses in operation for less than 2 years may receive loan priority.
For more in-depth information, and a set-by-step process, Download the CARES Act Checklist for Churches.
Keep an eye out for additional information as we continue the conversation and provide additional resources to help your team during the COVID-19 pandemic and beyond. We’re monitoring this ever-changing situation and will continue to provide resources wherever we can. Let’s continue to support each other and spread the message of the hope, power, and love we have in Christ. Because that is who He is.