5 Questions Pastors Need Answered to Serve Their Community Well During this Unprecedented Time

FREQUENT QUESTIONS REGARDING SBA LOANS AND CHURCHES | APRIL 7, 2020

The Paycheck Protection Act from the CARES Act.

The SBA website states: ( https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp)

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

The Paycheck Protection Program will be available through June 30, 2020.

How much can our church/ministry borrow?

Non-profit organizations and small businesses can apply to borrow up to 2.5 times their monthly payroll/utility/mortgage/rental expenses. If the borrower maintains full employment and uses the money for these specific expenses, they will be eligible to have the loan forgiven.

Do the loans have to be paid back? Is a collateral required?

The SBA website states:(https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources)

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months.

No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.  Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

Many religious law groups and denominational leaders, as well as legislators from both political parties, worked in recent days to clarify the issue.

Your church will not have to compromise. The interim rule states the following.

“All loans … will be made consistent with constitutional, statutory, and regulatory protections for religious liberty …”

“Nothing in [SBA nondiscrimination regulations] shall apply to a religious corporation, association, educational institution or society with respect to the membership or the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution or society of its religious activities.”

If you need to use this loan to make sure that your church can still effectively minister to your community in need, please reach out to your local lender. This will allow you to support and serve those in your community or possibly in your congregation. 

If you find that you do not have a bank in your local community, we can highly recommend First Liberty. You can go to FirstLibertyGA.com and in as little as 24 hours, they can get you approved for a loan. You can also call them at 770-253-4300. They can help any church from any part of the country. 

If you have not entered into the world of online giving, today is the day to get started. Even if you do not have a website for your church, you can provide online giving with no monthly charges.

Faith Wins has vetted companies for over a year and determined the best company to provide this service for your church is Anedot. This is an amazing Christian organization with no hidden fees. Anedot supports Biblical values and will not sell your congregation’s data. Find their information online at https://anedot.com. Online giving for your congregation can begin within 24 -48 hours.

If your church chooses not to use the forgivable loan and is not able to pay your salary, you are eligible for unemployment. The Covid Phase III Package will allow pastors and ministry staff who have lost their jobs to apply for unemployment benefits. This will be a temporary package that will last through December 31, 2020.

Normally the following are not eligible: self-employed, independent contractors, and those with limited work history. However, with our current situation, eligibility is available for anyone who is unable to work currently as a result of the virus. The law also allows those with reduced hours due to the virus to receive a pro-rated unemployment benefit.

Please note that if your church decides to take the forgivable loan and chooses to lay off or furlough you/staff, the loan will not be forgiven unless you/staff are quickly hired back and salary levels are maintained.

5 Questions Pastors Need Answered, to Serve Their Community Well During this Unprecedented Time

April 7, 2020 // Joey Deese 
 
  1. Is my church eligible for the forgivable loans made available to churches from the CARES Act? Can you tell me the basics and purpose?

The Paycheck Protection Act from the CARES Act.

The SBA website states: ( https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp)

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

The Paycheck Protection Program will be available through June 30, 2020.

How much can our church/ministry borrow?

Non-profit organizations and small businesses can apply to borrow up to 2.5 times their monthly payroll/utility/mortgage/rental expenses. If the borrower maintains full employment and uses the money for these specific expenses, they will be eligible to have the loan forgiven.

Do the loans have to be paid back? Is a collateral required?

The SBA website states:(https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources)

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months.

No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.  Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

  1. Will our church have to lose our Religious Liberty if we use this money?

    (Many religious law groups and denominational leaders, as well as legislators from both political parties, worked in recent days to clarify the issue.

Your church will not have to compromise. The interim rule states the following.

“All loans … will be made consistent with constitutional, statutory, and regulatory protections for religious liberty …”

“Nothing in [SBA nondiscrimination regulations] shall apply to a religious corporation, association, educational institution or society with respect to the membership or the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution or society of its religious activities.”

3. How do I Apply for the Forgivable Loans?

If you need to use this loan to make sure that your church can still effectively minister to your community in need, please reach out to your local lender. This will allow you to support and serve those in your community or possibly in your congregation.

If you find that you do not have a bank in your local community, we can highly recommend First Liberty. You can go to FirstLibertyGA.com and in as little as 24 hours, they can get you approved for a loan. You can also call them at 770-253-4300. They can help any church from any part of the country. 

4. How can our church ensure that our congregation is able to give tithe and offerings?

If you have not entered into the world of online giving, today is the day to get started. Even if you do not have a website for your church, you can provide online giving with no monthly charges.

Faith Wins has vetted companies for over a year and determined the best company to provide this service for your church is Anedot. This is an amazing Christian organization with no hidden fees. Anedot supports Biblical values and will not sell your congregation’s data. Find their information online at https://anedot.com. Online giving for your congregation can begin within 24 -48 hours.

  1. Are pastors and ministry staff eligible for unemployment?

If your church chooses not to use the forgivable loan and is not able to pay your salary, you are eligible for unemployment. The Covid Phase III Package will allow pastors and ministry staff who have lost their jobs to apply for unemployment benefits. This will be a temporary package that will last through December 31, 2020.

Normally the following are not eligible: self-employed, independent contractors, and those with limited work history. However, with our current situation, eligibility is available for anyone who is unable to work currently as a result of the virus. The law also allows those with reduced hours due to the virus to receive a pro-rated unemployment benefit.

Please note that if your church decides to take the forgivable loan and chooses to lay off or furlough you/staff, the loan will not be forgiven unless you/staff are quickly hired back and salary levels are maintained.

 

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