On March 19, I began to pray for the inclusion of Christian organizations in the bill as it made its way through the Senate. Senators Tim Scott, James Langford, and Marco Rubio worked to include "Faith-Based Organizations" in the Paycheck Protection Program.
However, when the bill came out and the Small Business Administration (SBA) began taking applications, many Christian organizations were fearful of government assistance for many reasons.
There are four reasons I heard from faith-based organizations that decided to decline these government funds. However, the government has since addressed these concerns, and I want to make sure you realize that $120 billion is available through June 30, 2020.
1. Worried about the separation between church and state. Christian organizations expressed to me they were worried about if they took government funds, then the government would use that to direct or dictate changes to their church, Christian school or nonprofit.
"All loans guaranteed by the SBA pursuant to the CARES Act will be made consistent with constitutional, statutory, and regulatory protections for religious liberty, including the First Amendment to the Constitution, the Religious Freedom Restoration Act, 42 U.S.C. 2000bb–1 and bb–3, and SBA regulation at 13 CFR 113.3–1h, which provides that 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."
"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."
2. Worried about the good-faith certification that borrowers would need to sign to prove that these funds were "necessary" for the organization. This was clarified on April 3, 2020.
Question No. 46: How will SBA review borrowers' required good-faith certification concerning the necessity of their loan request?
Answer: When submitting a PPP (Paycheck Protection Program) application, all borrowers must certify in good faith that "current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant." SBA, in consultation with the Department of Treasury, has determined that the following safe harbor will apply to SBA's review of PPP loan with respect to this issue: Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.
3. Worried that the organization could not fully use all of the 2 1/2 months of payroll during the eight weeks allotted for in the PPP program. The Paycheck Protection Program Flexibility Act of 2020 in Section 3 b 1 declares the eight weeks to use the PPP funds has been extended to 24 weeks after receiving funds or Dec. 31, 2020, whichever comes first.
4. Worried that the Christian organization would not be able to bring back all of its employees due to the closing of Christian schools, being forced to virtual church services or closing of nonprofit. PPP guidance early on stated that you need to fully restore your full-time employee equivalents before June 30, or your PPP loan would not be fully forgiven.
The Paycheck Protection Program Flexibility Act of 2020 in Section 3 b 7 B provides the following:
An organization can receive full forgiveness of its loan about if they are "able to document an inability to return to the same level of business activity as such business was operating at before Feb. 15, 2020, due to compliance with requirements established or guidance issued by the secretary of Health and Human Services, the director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration during the period beginning on March 1, 2020, and ending Dec. 31, 2020, related to the maintenance of standards for sanitation, social distancing or any other worker or customer safety requirement related to COVID–19."
5. Worried that the name of your organization and loan amount would be disclosed to the public. On Wednesday, June 10, 2020, Treasury Secretary Steve Mnuchin said, "As it relates to the names and amounts of specific PPP loans, we believe that that's proprietary information and in many cases for sole proprietors and small businesses, is confidential information."
At Vanderbloemen, we have provided lots of slides, spreadsheets for loan calculations and loan forgiveness, and videos concerning different aspects of the Paycheck Protection Program. Please refer to ChurchCovid19.com or SchoolCovid19.com for more information.
Sutton Turner is the chief operating officer at Vanderbloemen, which serves teams with a greater purpose by aligning their people solutions for growth: hiring, compensation, succession and culture. Through its retained executive search and consulting services, Vanderbloemen serves churches, schools, nonprofits, family offices and Christian businesses in all parts of the United States and internationally.
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