This blog post is part of an ongoing series that aim to assist youth service providers in their COVID-19 response efforts. For more information and resources, please visit TNOYS’ blog, or visit the COVID-19 resource page.
In response to COVID-19, the federal government has made several funding opportunities available to small businesses and nonprofits. TNOYS is closely monitoring updates and new opportunities, and we will add more information to this post as it becomes available.
As of this writing, three bills addressing COVID-19 and its economic impacts have been passed at the federal level. A fourth bill to address the gaps and new issues that arise is being discussed. As new legislation is drafted and passed, TNOYS will continue sharing information that supports or impacts your organizations and the youth you serve. For now, the following financial programs and opportunities may provide some financial relief as we all work through these difficult times and support our most vulnerable youth.
Please note: rules and regulations to implement the programs below are still being drafted, so not all details are available or may change in the coming days.
Paycheck Protection Program
This program is available to 501c(3) nonprofits and small businesses with fewer than 500 employees. If you have lost or will lose revenue during the COVID-19 pandemic, it is worth considering. Loans can be requested to cover as much as 2.5 times your average monthly payroll expenses over the last year (including benefits, etc.) up to $10 million. The funds can be used to cover payroll, rent, utilities, and interest on debt.
If you keep your employees on staff without pay cuts during the pandemic, the organization can request loan forgiveness and the loan effectively becomes a general operating grant. More information and the application can be found at the small business administration website. Applications go through local lenders. Many local banks are still working through details and may take more time to start processing loans. It’s important to check with your bank on timelines.
Economic Injury Disaster Loans (EIDL)
This program is available to “private nonprofits” and small businesses with fewer than 500 employees. It should be noted, the SBA is currently considering the following as nonprofit eligibility: “Applicant is a private non-profit organization that is a non-governmental agency or entity that currently has an effective ruling letter from the IRS granting tax exemption under sections 501(c),(d), or (e) of the Internal Revenue Code of 1954, or satisfactory evidence from the State that the non-revenue producing organization or entity is a non-profit one organized or doing business under State law, or a faith-based organization.”
The recently passed coronavirus response legislation — CARES — added new funding to this program to increase the number of organizations that could benefit. Organizations can apply for loans and will receive an advance of up to $10,000 within 3 days of application. The advance does not need to be paid back, even if the loan is denied. However, the advance must be used for: maintaining payroll expenses, covering paid leave, rent/mortgage, and increased supply chain costs. Applications and loans will be administered through the Small Business Administration. Applications are open.
Payroll Tax Credits
Nonprofits whose operations were partially or fully suspended due to COVID-19 or who realize a loss of revenue of more than 50% (compared to the same quarter in the previous year) are eligible for a payroll tax credit of up to $5,000 per employee. The payroll tax credit is available for wages from March 13 to December 31, 2020. Organizations that receive Paycheck Protection Program funds are not eligible for the Payroll Tax Credits.
We will update this post as more information becomes available. For additional guidance related to COVID-19, please visit the TNOYS blog, which we are updating regularly with the latest information. We are also posting regular updates to TNOYS’ Facebook and Twitter.
Please do not hesitate to reach out if you have any questions or concerns. TNOYS is here to help you.