[Education] PPP Nonprofit Loan Forgiveness Comes Early

[Inside Charity]

[Nonprofit Execs & Board Members, PPP Loan Forgiveness Comes Early

PLUS THE NEWLY ISSUED PPP LOAN FORGIVENESS APPLICATION FORM 3508EZ

(Because of your important work with Charitable Organizations)

Dear Nonprofit Execs & Colleagues In Service,

PPP Nonprofit Loan Forgiveness Comes Early is based on SBA guidance released last month declares that PPP recipients can apply for loan forgiveness early but that doing so could cost them money.

In a 34-page interim final rule (IFR) issued in consultation with Treasury, the U.S. Small Business Administration (SBA) addresses a number of issues related to the PPP, which was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide forgivable loans to small businesses, not-for-profits, and certain other entities hurt by the economic impacts of the COVID-19 pandemic and associated government-imposed quarantines.

Specifically, the new interim final rule makes revisions to previous guidance to reflect the Paycheck Protection Program Flexibility Act of 2020, which became law on June 5 and made significant changes to the PPP, most notably:

Expanding to 24 weeks, from eight weeks, the covered period during which PPP loan recipients can spend the funds and still qualify for loan forgiveness. The 24-week period applies to all loans made on or after June 5. Borrowers that received loans before June 5 can choose to elect an eight-week period.

Lowering to 60% from 75% the proportion of PPP funding that must be used on payroll costs to qualify for full forgiveness.
Expanding the term for new loans to five years from two years. Borrowers with loans received before June 5 can extend their loan term to five years if their lender agrees.

Most of the changes implemented by the new interim final rule were covered in previous guidance and in the PPP loan forgiveness applications released last week. Chief among the new material is the explanation of the process for applying early for loan forgiveness.

Inside Charity is pleased to report that over 200,000 executives, staff, board members, ministry leaders and volunteers rely on Inside Charity for their nonprofit news. We're grateful to everyone who has participated and want to encourage as many as people as possible to continue to share their experiences. Your written comments and contributions have helped your colleagues navigate this process.

We are all in the throes of the global pandemic. Charities everywhere are feeling the effects of isolation measures, business shutdowns, travel bans, and markets crashing. InsideCharity is here to make sure receive the information you require to navigate these unprecedented times. We're in direct contact with the financial experts at the SBA to provide you real-time updates you need to navigate CARE Act funding.
We look forward to hearing from you. Simply reply to this email or subscribe above to ensure you receive CARES Act Updates every time the Federal Government makes them available.

Warmly,
James P. LaRose, CNE, CDE, CNC

Senior Editor

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