Below are some answers to frequently asked questions that church leaders have been asking about the federal CARES Act's Paycheck Protection Program. If you have a question that's not addressed here, the U.S. Department of the Treasury has released a more comprehensive FAQs document. You are also welcome to contact Barb Brower (612-618-2416) or Sheri Meister (605-360-8995).
The program’s funds were depleted before I got a loan. What can I do?
The Payment Protection Program was continued and funds are available again, so complete the application and contact your bank. (Check that the bank is an SBA-certified lender.)
Why should my church apply for this loan?
In these economically uncertain times, when many churches are facing or anticipating changes in giving among members, this loan can help you keep your staff employed. The payroll portion of the loan is 100 percent forgivable, so while it goes toward salaries, you can use regular gifts to continue to fund your church’s mission and ministry. In other words, the loan gives you a cushion so that you’re better positioned to absorb a decline in giving should you face one now or later on.
How do I submit the loan application after it’s filled out?
The application must be submitted to the SBA by a bank that’s an SBA-certified lender; you cannot submit your application directly to the SBA. Start by checking with your church’s bank to see if it can work with you submit your application. If it can’t, ask for a recommendation of another local bank that could work with you.
The annual conference office applied for and received a loan. Does that cover my local church?
No. Each local church must apply for its own loan. The loan that the conference office received will be used for the conference’s operating budget so that we can continue to employ conference staff and invest in conference-wide ministries in this challenging season.
How is the annual conference handling the Paycheck Protection Program loan that it received?
The annual conference is treating the funds as a loan and recording it as a liability on our balance sheet. We are keeping the funds in a separate account and using them very judiciously. We are also tracking and documenting all of the expenses we are paying with the loan in the event that it is forgivable. But at this point, we are expecting that we may need to re-pay the loan with 1 percent interest. So, in essence, we are using it for cash flow purposes.
What do I need to do after I get the loan?
It’s important to remember that it is a loan, not a grant. You should keep detailed records in order to be prepared to show exactly how your loan was used. We suggest depositing your loan money in a separate bank account so that you can keep a careful accounting of how it’s used.
How much of my loan will be forgiven?
How can I request loan forgiveness?
When does the eight-week period for using loan proceeds begin?
It begins on the date when the loan is disbursed and the funds are deposited into the organization’s account. Loan funds may not be used to fund expenses incurred prior to that date.
Minnesota Annual Conference of the United Methodist Church