Urgent Notice Regarding Financial Relief for Churches & Church Employees
Significant government-sponsored financial support will be made available to protect the financial wellbeing of your church and employees beginning April 3rd. However, due to the anticipated large number of likely applications, it is important that your church complete your application as soon as possible to take advantage of the program.
Specifically, the Paycheck Protection Program (PPP) provides small businesses with funds to pay up to eight weeks of payroll costs, including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities. The particulars of the program and how to apply are included in this link. The program provides for grant forgiveness of the loans when used for payroll costs, interest on mortgages, rent, and utilities. Please reach out to your qualified bank, existing SBA lenders, credit unions, and other lenders for application submission instructions.
Paycheck Protection Program (PPP) is the part of CARES Act that gives loans of 2.5 times the average monthly payroll of a small business or nonprofit. These loans can be forgiven if the number of employees does not decrease. Section 1102 describes eligible entities as 501c3 tax-exempt organizations. Please note: congregations come under the umbrella 501c3 exemption of the Evangelical Lutheran Church in America. To prove their tax-exempt status, congregations would have to obtain the standard tax-exempt letter from the Secretary’s (Counsel’s) office. This should be done as soon as possible. To initiate the Group Ruling Exemption process for your congregation or other ELCA entity or organization, please send an e-mail to [email protected]. Enter in the subject line “501 (c) (3) Exempt Status,” note in the body of the email the legal name of the congregation, address of the congregation, and Tax ID number, and send it. A church email is preferred for the ELCA to send the digital certificates. Additionally, please take a look to the "GUIDELINES FOR CORPORATE APPROVALS".
To apply you will need:
- TIN/EIN for the church
- Payroll records to calculate average monthly payroll. For purposes of calculating “Average Monthly Payroll”, most Applicants will use the average monthly payroll for 2019, excluding costs over $100,000 on an annualized basis for each employee. For seasonal businesses, the applicant may elect to instead use average monthly payroll for the time period between February 15, 2019 and June 30, 2019, excluding costs over $100,000 on an annualized basis for each employee. For new businesses, average monthly payroll may be calculated using the time period from January 1, 2020 to February 29, 2020, excluding costs over $100,000 on an annualized basis for each employee.
- The completed form must be submitted to your SBA Participating Lender (see #4, below). You should consult with your local lender/bank as to whether it is participating.
- Visit www.sba.gov for a list of SBA lenders, click HERE to look for local assistance by entering your zip code.
- Apply as soon as possible.
Click HERE for the application link.
Click HERE for the Borrowers PPP Fact Sheet.
Click HERE to visit the Department of Treasury PPP Overview document.
Click HERE to visit the US Chamber of Commerce/Emergency Loan Guide and Checklist.
Click HERE to read the "Economic Relief for Non-Profit Organizations Through the Paycheck Protection Program" article by Jodi Warren, associate attorney at Capell Barnett Matalon & Schoenfeld LLP
**Pastors, please note you may be eligible for self-employed benefits.
Click below for another helpful resource:
ADDITIONAL INFORMATION ON FILLING OUT THE APPLICATION
- The space on the application for ownership of 20% or more of the entity does not apply and should be left blank; Remember, the “applicant” is the congregation—the religious corporation
- Do NOT say that the Synod or the ELCA owns the congregation:
- If they are improperly lumped together, it could put the congregation over 500 employees and not eligible for the loan.
- Do you share common management or ownership (question 3 on the application)? NO.
- Is a congregational/council meeting necessary to approve borrowing money? Please refer to corporate guidelines to prepare for congregation/corporate action if needed. For more information, see the video from the MNYS Webinar