Following CARES Act passage, $350 billion of loans available to small businesses and non-profits
The loans, which can be forgiven up to 100%, will be issued through Small Business Association-approved lenders
Following Friday’s passage of the CARES Act, which is providing $2 trillion to support the U.S. economy amid the coronavirus, non-profit organizations and small businesses are expected to scramble to apply for the $350 billion available in small business loans to keep employees on payroll through the global pandemic.
How it will work: Once the loans are made available, non-profits will have to apply through the roughly 800 Small Business Association-approved lenders and banks around the country to receive the funds, which account for 2.5 times the average total monthly payroll costs incurred by the non-profit, provided the amount does not exceed $10 million. Organizations and businesses that keep their staff on at full salary qualify for total loan forgiveness.
Dash for cash? A Jewish Federations of North America policy expert based in Washington told JI that millions of small businesses and non-profits will be competing for the funds through the end of June, but, “if things don’t improve or if things get worse dramatically,” future legislation may be introduced to change the dates and amount of money available.
Another option: The Economic Injury Disaster Loan Program, which predates the CARES Act, provides loans of up to $2 million to small businesses, but the amount must be repaid.
Why it matters: Jewish Federations of North America CEO Eric Fingerhut noted that the American philanthropic community is unique in the support it provides. “It’s philanthropy that supports so much of the core social safety net, and even education and youth programming and seniors programming and all the important things in our country,” Fingerhut told JI. “It would just be a huge loss to the country and a blow at this time when people are already, when our services and our structures are already challenged, if the non-profit sector were not supported the same way you would support the major industries in America.”