The following is from Church of God General Overseer Tim Hill:
As you have probably seen this morning, the Senate passed a massive $2.2 trillion stimulus bill overnight, called the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act.” This legislation is expected to be voted on in the U. S. House of Representatives on Friday.
Of interest to our churches, the bill contains a $367 billion Small Business Administration (SBA) loan program. The loans convert to grants (and can be forgiven) if used for covering employee salaries, rent, paid leave, utility payments, health insurance premiums or other necessities or worker protections.
Although normally nonprofits/churches cannot apply for SBA loans, an exception has been made under this bill, and based upon the current legislative language, these funds will be available to churches also. Application will be made through the church’s local bank and the loan will be guaranteed by the SBA. The interest rate on the loan, if not forgiven, cannot exceed 4.00% and the loan must be repaid in ten (10) years. It is expected that no security collateral will be required.
While churches can apply for these loans and the forgiveness program, they should exercise caution and understand the restrictions that come with the loans. Each church that applies should have a detailed conversation with their local banker before proceeding.
It is expected that the House will pass the bill on Friday and it will immediately go to the President for signature. I am being told that it will take the SBA at least 10 days or more to write the regulations to implement this provision. So, these loans will not be available for probably at least a couple of weeks if all goes perfectly well.
Should anything change as the House considers this bill tomorrow, I will let you know.