By Rocky Poole

On Friday, March 27, the President signed into law the Coronavirus Aid, Relief, and Economic Stability (CARES) Act. To lessen the economic impact of the coronavirus crisis, the CARES Act has $2.1 trillion of aid, some of it direct, for businesses, nonprofits, state and local governments, and individuals.

The provision of most interest to churches is the $349 billion Payroll Protection loan fund, to be administered by the Small Business Administration (SBA), to help small employers, 500 employees or less, to maintain their current payroll. The SBA will distribute the funds through local SBA lenders.  While the experts continue to research the almost 900-page law document and we await the SBA to issue specifics (guidelines and process), here is, as of this writing, general information:

  • Small employers eligible for loans include nonprofits and religious entities.
  • Loans will be based on 2.5 times average monthly payroll costs from 03/01/2019 – 02/29/2020. (Ex. Average monthly payroll over the above period is $10,000. Employer is eligible for a loan of $25,000.)
  • There will be no payments required on the loan until 2021.
  • Up to the full amount of the loan may be forgiven based on employees during 02/15/2019 – 06/30/2019 compared to employees during the same period of 2020. (Ex. If the employer had 10 employees for the period in 2019 and 10 employees for the period in 2020, 100% of the loan is forgiven. If the employer had 10 employees for the period in 2019 and 9 employees for the period in 2020, 90% of the loan is forgiven and 10% must be repaid.)
  • If there is an amount to be repaid, it will be a 10-year loan with an interest rate of not more than 4% with payments beginning in 2021.
  • No collateral or personal guarantees will be required.
  • No fees will be charged.
  • There will a good faith certification required to certify that funds were used only for payroll, mortgage, lease, and utility payments.

The US Chamber of Commerce has developed an emergency loan guide and checklist for small business
and nonprofits.


  • Immediately contact your local bank to let them know your church is interested in information on the CARES Act Payroll Protection (small employer assistance) loans. (If your bank is not an SBA lender, ask for a referral to a bank in your community that is.) Contacting your bank does not guarantee you will get a loan or require you to take a loan. Since these funds will be distributed on a first-come, first-served basis, it is a good idea to let the bank know your church is interested in getting the application information once it becomes available.
  • Start compiling information on the employee compensation for the time period listed above.