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Summary Of CARES Act Webinar
March 31, 2020, 5:00 PM

CARES Act Small Business Payroll Protection Program

Thom Rainer hosted a webinar about the CARES Act and how small businesses and churches may be able to take advantage of an opportunity designed to help them keep people employed. What follows is simply a general summary.  I may have misunderstood some facts or altogether missed other facts. There are specific details that affect qualifying, pay back and possible loan forgiveness. At the end of the post is a link to the same webinar I viewed so that you can view a recording of it (there is no cost – it is free – nothing to join or download). Here is some information pertinent to churches (but also true for any small business – for-profit or non-profit) gleaned from the webinar:

Beginning later this week, churches will be able to apply for a non-recourse loan that will be underwritten by the Federal Government. There will be no requirement for collateral or security on the part of the church. Should a church close before paying off the balance of the loan, the Federal Government will absorb the unpaid balance. There will be no action against the church members to complete repayment (if the church has closed). There are guidelines that define eligibility, but most normative size churches should qualify.

The purpose of the loan is to help churches be able to continue to employ the same staff and contract workers as they had before the self-quarantine actions related to the Coronavirus discouraged churches from hosting gatherings of more than 10 people in their facilities. The loan is designed to be used by the church to pay salary, wages, benefits, retirement, payroll taxes as well as the cost of contract service providers such as custodial or lawn care services.

Churches can apply for a loan for 2½ times their average monthly personnel-related costs. If approved, they should receive their funds rather quickly. It makes no difference if an employee at some point ‘opted-out’ of the Social Security program. For the sake of this program, self-employed ministers are eligible because the loan is for the church for all the people they employ. Churches do not have to have a 501 (c) (3) registration number. By their very nature, they are recognized by the Federal Government as a non-profit.

Some pastors, church leaders and church members may have reservations about accepting a federal loan. Baptists strongly believe that each believer and local church is free to approach God and ask for his direction regarding any life issue – this is no different. You and your church must seek God’s will and then follow it. No doubt, there will be those who see this issue from many different perspectives. There is no government or church authority that can tell a church how they should consider this issue. Each church must decide for themselves and respect the decisions other churches make.

To apply, approach a bank that makes Small Business Administration loans. Check first to see if your bank does. Find a bank participating in the “Paycheck Protection Program” through the Small Business Administration. Approach them as to how you are to proceed to apply for the loan. If you make a mistake in the application process, your request will be denied and you will have to begin all over again – that is to say, you will be moved to the back of the line. There is no cost to apply.

However, there are service providers who (for a fee) will guide you and help you through the process. One of the co-sponsors of the webinar was Chaney & Associates from Roseville, California. No doubt, there are other vendors who will provide a similar service, again, for a fee.

Once the loan application is approved, you will receive the funds from the Small Business Administration. You very well may be able to have the loan forgiven and not have to pay back any of the loan. There are specific details, but in general, there are two main requirements. 1) ALL of the funds must be appropriately spent in an 8-consecutive-week period before a prescribed deadline. 2) Your Full-Time Equivalent employment rate must remain at 100%. That is to say, you must have the same size staff and contract labor arrangement – no down-sizing or lay-offs. If you meet those requirements, then the entire loan will be forgiven and you will not be required to pay back any of the funds.

I am not a certified public accountant. I do not claim to be fully accurate in these remarks. You should seek the counsel of your banker, a representative from the Small Business Administration or a certified public accountant to give you correct information. Take the time to view the recording of the webinar at the link below.

In my personal opinion, this is an option worth consideration. All of our churches have been impacted by having to reduce or eliminate gatherings in their facilities. Giving among our churches is directly related to attendance. When folks do not attend, they do not give as much. Churches can try to absorb the cost but will end up reducing ministry spending in order to meet fixed obligations and payroll-related expenses. Only $350 million has been designated for this program. Once that money is distributed, the program will end. If you wait too long to apply, the funds may gone and you will not be able to benefit.

If you are interested in using Chaney & Associates to help you with both the application process and the loan forgiveness process, their basic retainer fee is $275. If you are approved and employ 5 persons or less, their processing fee is $150. If you employ more than 5 persons, the fee is based on a graduated scale. They employ trained staff members who will have the answers to your questions and have relationships established with approved lenders who will give you expedited service. I have no investment in their service or any other service. It will not profit me if you choose to use a paid service to help you with this process. But you do not have to pay anyone. You can apply on your own, but there will be technical questions that you may not be able to get answers for if you do.

Feel free to contact me if you have any questions. Thank you.

Link to recording of March 31 webinar:

Link to page of on-line resources related to the CARES Act:

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