What Nonprofits Need to Know About the FFCRA, CARES Act and PPP Loan Forgiveness
Like for-profit businesses, nonprofit organizations are looking for relief from the financial effects of COVID-19. Fortunately, both the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief and Economic Security Act (CARES Act), provide benefits for nonprofits. Typically, nonprofits have been excluded from these types of packages. One of the most sought-after loans is the SBA’s Paycheck Protection Program (PPP). Part of the program’s appeal are the generous loan forgiveness provisions attached to the PPP. Nonprofits are encouraged to familiarize themselves with the forgiveness terms as they prepare their applications.
This piece discusses key elements of the FFCRA and CARES Act, including PPP loan forgiveness, that will be most relevant to nonprofit organizations. Additionally, it specifies how The CARES Act defines which nonprofits are eligible for the PPP:
Section 501(c)(3) organizations and section 501(c)(19) veterans’ organizations in existence on February 15, 2020 (with paid employees/independent contractors) and with 500 or fewer employees[3] are eligible for the emergency 7(a) loans. “Employees” for this purpose includes “individuals employed on a full-time, part-time, or other basis.” Independent contractors do not constitute employees for the purposes of PPP loan calculations; however, independent contractors are able to apply for their own individual PPP loans. The loans are available from February 15, 2020 until June 30, 2020 (the “7(a) loan period”).
-The FFCRA and CARES Act: Key Provisions Affecting Nonprofit Organizations, The National Law Review
We know that things are happening quickly and a lot of new information is coming out daily. Know that the team at Livingston & Haynes is always here to provide guidance. We’ve formed a CARES Act response team to better support our individual, small business, and nonprofit clients as we all work together to recover from this crisis. In the meantime, please don’t hesitate to reach out with questions or concerns.