But unless you made draconian cuts, at least some of the loan can still be forgiven even in this less-optimal state. If you have reduced headcount or compensation, the amount of the loan eligible for forgiveness will fall proportionately. Then, the entire $50,000 will be forgiven (after you submit documentation showing how you spent the money), as long as you have not reduced the number of employees on your staff or reduced anyone’s compensation by more than 25%.Payroll (at least 75% of the money is spent here).In the 8 weeks after you receive the loan, let’s say you use all that money on:.If your nonprofit has average payroll costs ( defined in more detail on page 3 of this document) of $20,000/month over the past year, you can apply for a loan for 2.5 times that, or $50,000.There are caveats to keep in mind, but, the bottom line is still that this is a way to access an enormous amount of funding for your organization.
As long as your organization spends the loaned money on payroll, mortgage payments, rent and utilities, and you maintain your payroll, the entire loan amount can be forgiven, converting it into a grant.No personal guarantee or collateral is required.
This program offers nearly all nonprofits a loan for 2.5x your average monthly payroll expenses (max of $10m). This program creates a new type of loan that will be disbursed by the hundreds of Small Business Administration (SBA) partner banks across the country. The CARES Act, signed into law on, created the $350b Payroll Protection Program, which is being implemented as this post goes to press.