PPP2 Loans Available Now

As many of you know, Congress passed a new economic stimulus plan called the “Consolidated Appropriations Act, 2021 (CAA)” in December 2020, which includes $284 billion for Paycheck Protection Program (PPP) loans available to churches and other small non-profit and for-profit businesses. 

Much like the first round of PPP loans, borrowers may apply now to their bank (or any bank offering small business loans) to receive a loan amount of up to 2.5 times the average monthly payroll costs in the one year prior to the loan (or in 2019 or 2020); loans can be “forgiven” if at least 60% of loan proceeds are used for payroll costs and 40% or less are used for other covered expenditures like lease, rent, and utilities; and a borrower can elect a coverage period of 8 to 24 weeks.  More good news:  Borrowers who previously returned or did not accept all or part of their PPP loans may reapply.

However, in order to be eligible to apply for a first time or second PPP loan now, you not only have to make a good faith certification about current economic uncertainty (stating that the loan is necessary to support your ongoing operations).  You will also have to demonstrate at least a 25% reduction in gross receipts in any completed calendar quarter of 2020 compared with the same 2019 quarter.

The CAA also makes the Employee Retention Credit (ERC) available to PPP borrowers.  However, to be eligible for that credit, your business had to be suspended under orders from a governmental entity; or you had to experience a 50% or more reduction in gross receipts in any calendar quarter of 2020 as compared with the same quarter of 2019.

Thankfully, our Conference and many of our local churches will not qualify for either the new PPP or ERC programs!

Our prayers are with all Texas Annual Conference church leaders faithfully trying to lead congregations and non-profits through this difficult season.

We hope this information is helpful to you. 

For more information, contact Treasurer Rev. Carol Bruse at cbruse@txcumc.org.