Thankfully, the coronavirus is waning, but its impact on nonprofit organizations will be felt for a long time. If your organization hasn’t already taken advantage of all available programs to help nonprofits, it’s not too late for some assistance.
Late in 2020, the Consolidated Appropriations Act (CAA) of 2021 passed both houses of Congress, providing $900 billion in additional funding for COVID-related aid. This second round of funding extends certain programs, as well as broadens the application of funding, in some cases retroactively.
Paycheck Protection Program (PPP)
The deadline for PPP Second Draw Loan funding passed on May 31, 2021. While at least 60 percent of the loan must be used for payroll expenses, both payroll and non-payroll definitions were expanded and clarified in the CAA.
Eligible expenses now include additional employer-paid benefits, mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations. Additionally, the covered period is more flexible, between 8 and 24 weeks.
Applying for PPP loan forgiveness also became easier, particularly for organizations with PPP loans under $150,000. A simplified forgiveness process for these borrowers requires only a one-page certification letter attesting to the number of employees retained, the amount spent on payroll costs, and the total loan value.
Economic Injury Disaster Loans (EIDL)
The CAA added $20 billion in funding for the EIDL program and extended it through the end of 2021. Second round EIDL loans are again being administered and serviced by the Small Business Administration (SBA) and offer low interest loans (30-year fixed at 2.75 percent for nonprofits) with no prepayment penalty or fees.
A new maximum loan amount of $500,000 was announced in March 2021, and organizations that had smaller loans approved prior to April 7, 2021 may be eligible to apply for an increase.
Unlike PPP loans, EIDLs have fewer restrictions placed on how the money can be spent. It can be used for working capital and normal operating expenses. Loans for $25,000 or less don’t require collateral, which can be helpful for many nonprofits.
Shuttered Venue Operator Grants
This SBA grant, also known as the Save Our Stages (SOS) program, provides grants up to $10 million (or 45 percent of 2019 gross revenue) to theater and live venue operators, performing arts organizations, certain museums, and talent representatives. Of the $16 billion allocated for this funding vehicle, $2 billion is reserved for entities with 50 or fewer full-time employees.
This grant has similar eligibility requirements to second-round PPP in terms of decline in gross earned revenue from a quarter in 2019 and the same quarter in 2020. SOS grants can be used to cover payroll, rent, mortgages, and renovations required to meet health and safety protocols as venues reopen. The SBA is prioritizing SOS applications, starting with applicants that have suffered the greatest losses.
As you might expect, applying for these COVID relief programs can be complicated. The SBA website has FAQs and other information that can provide guidance.
If you have questions about your COVID relief options, please contact our Nonprofit Group.