Congress has passed — and today the President signed — the Paycheck Protection Program Flexibility Act (PPPFA). Among its major provisions, the bill provides borrowers with additional flexibility and time to use PPP loan funds and still receive forgiveness on the loan. Highlights of the bill and lingering questions include:

• PPPFA extends time period to use funds from 8 to 24 weeks.

  • Borrowers now have 24 weeks from the disbursement of their loan to use PPP funds, though they may still elect to use the 8 week period if beneficial.

  • Big Question: Does this mean 24 weeks of payroll or just 8 weeks of payroll that can be expended over 24 weeks? Guidance is still pending.

• PPPFA reduces the amount of the loan needed to be spent on payroll from 75% to 60%.

  • Borrowers may now spend up to 40% of PPP funds on approved non-payroll expenses such as rent, utilities, and mortgage interest.

• PPPFA extends the amount of time to rehire workers from June 30 to December 31.

  • This provides additional needed flexibility, especially for borrowers whose operations are significantly impacted by Covid-19.

  • Big question - what if you opt for an 8 week forgiveness period- do you still need to have the same FTEs in December?

• PPPFA relaxes re-hire requirements in specific instances.

  • Borrowers may receive an exemption from a reduction in loan forgiveness if in good faith they can certify an inability to rehire eligible employees, similarly qualified employees, or return to a similar level of business activity of before February 15, 2020.

• PPPFA changes the repayment term from 2 to 5 years.

  • The 1% interest rate on the loan remains unchanged.

  • Big question- who will have the authority and what will the process be for changing the terms of the loans?

Many of these changes stand to benefit nonprofit organizations around the country who have taken advantage of the funds available through the PPP. Sign up for our emails HERE — Nielsen Training & Consulting will continue to monitor critical legislation that impacts nonprofits and provide updates and analysis as available. Stay well friends!

Since the passage of the CARES Act, we have all been inundated with information regarding the Paycheck Protection Program (PPP).  From the initial launch of the program to the almost immediate depletion of funds to the uncertainty around the rules for forgiveness, the experience has had more twists and turns than a mystery novel for nonprofit leaders.

“I can’t tell you how much I appreciate all of your help and support. I would be so lost without you. I have received NO help from anyone else. I really can’t thank you enough for your kindness.”

- PASSAIC COUNTY CENTER CHILD CARE PROVIDER

Over the past month, Nielsen Training & Consulting has been proud to partner with Civitas Strategies to make the process more equitable and the results more successful for early learning providers in the State of New Jersey.  With support from the Maher Foundation, the Henry and Marilyn Taub Foundation, Nicholson Foundation, and the Burke Foundation, we designed and deployed a comprehensive Technical Assistance program to assist early learning providers and organizations. Technical Assistance was provided in four ways — webinars, an online intake questionnaire, live, personalized 1:1 consultation, and application support.  The results for these organizations have been significant, including:

• 92 organizations completed the Technical Assistance program

• $3.33 million stimulus potential for all completed TA Cases as of May 15, 2020

• $2.23 million stimulus generated by secured loans as of May 15 2020           

“I feel like you are part of the family here with us.”
- ESSEX COUNTY CENTER CHILD CARE PROVIDER

We have learned a great deal from this project, and have prepared a comprehensive report on the project with lessons learned, additional PPP information, and recommendations for the future.  I invite you to review the report and if helpful, share with your stakeholders and communities.  A copy of the report is linked below.

“I can’t believe you keep answering the phone.  You’re the only person who gets my frustration.”
- MERCER COUNTY CENTER CHILD CARE PROVIDER

We are also now entering a pivotal next phase for those who have secured loans under the PPP -- forgiveness.  In case you missed it, the Treasury Department has recently released the application for loan forgiveness under the PPP (linked below).  If you or your Board members have questions about the CARES Act, PPP, or would benefit from a webinar with information and recommendations for applying for loan forgiveness, please do not hesitate to reach out.  As always, Nielsen Training & Consulting is here to keep you informed, answer your questions, and partner with you.  Thank you for your leadership and immense sacrifices during this time of crisis.   

Excited to share that I will be a featured speaker at the upcoming Survive and Thrive Nonprofit Online Summit. The Summit is an action-packed day featuring more than 6 speakers discussing strategies for your nonprofit to successfully survive and thrive in the COVID-19 crisis and beyond...all from the comfort of your home remote office.

I will be speaking on Understanding the CARES Act and Other Emergency Supports for Nonprofits. Join me!

Over the past few weeks, I have advised many nonprofit leaders as they considered and applied for the Paycheck Protection Program (PPP) created by the CARES Act. As a newly created forgivable loan program, we have all learned a great deal during this process. With the announcement from the Small Business Administration (SBA) that appropriated funds for the program have been exhausted, I thought it would be a good time to pause and reflect on lessons learned so far from the PPP process that might help nonprofits if and when the program reopens.

1 Prepare.

The single most important factor in getting nonprofits approved under the PPP in a timely fashion is preparation. While the PPP application itself is straightforward, and can be completed online in a matter of minutes, preparing to file the application requires the gathering of appropriate documentation, and attention to detail. Nonprofit leaders should ensure they have the following supporting documentation when applying (where available):

• Salary and Wage Information:

  • Company w-2s, quarterly form 941 filings, or payroll company reports

  • Employer Tax Contributions: Forms or payroll reports documenting employer state and local tax contributions

  • Employer Benefit Contributions: Group health insurance plan invoices Retirement plan contribution reports

2. Obtain Board Approval.

At its most basic level, the PPP is a loan program from the federal government administered through individual banks. While the program provides opportunities for all or a portion of the loan amount to be forgiven, nonprofits must understand and accept that any portion not forgiven will be treated as a loan that must be repaid. It is recommended that nonprofit leaders secure Board approval to apply for the loan, and some banks may even request proof through a Board resolution.

3. Select your bank wisely.

There is no way to sugarcoat this -- the bank applicants choose to apply through unquestionably matters. Countless nonprofit leaders have experienced the frustration of broken online portals, lack of responsiveness, repeated requests for the same information already provided. Though it may be an overgeneralization, I have found that smaller, local banks have fared far better in submitting applications in a times fashion, securing approval, and disbursing funds than large mega-banks. Also, while many banks require the organization to have an existing banking relationship in order to apply, that is not universally the case. Banks accepting applications from non-account holders include:

• https://www.fundera.com/

• https://www.fountainheadcc.com/ppp

Nonprofits may also consider applying through Paypal, Intuit, Square, and others.

4. Be meticulous in recordkeeping.

As mentioned earlier, the loan obtained under the PPP may be forgiven if specific conditions are met. While we know what the law says about the amounts that can be forgiven, the rules regarding the forgiveness process have yet to be published. Nevertheless, just as preparation was a key to a successful application, I fully expect meticulous recordkeeping to be a key to a successful request for loan forgiveness. Nonprofits should keep all receipts for amounts paid using loan funds, write hard checks where possible, keep all invoices, and be prepared to produce accurate payroll reports substantiating the use of the loan funds.

While we all await Congressional action relative to funding the PPP, it is my hope these tips provide guidance for you and your organization if and when the PPP again begins funding nonprofits. As always, Nielsen Training & Consulting is here to keep you informed, answer your questions, and partner with you.