President Trump signed legislation that provides additional funding for the popular Paycheck Protection Program, which provides small businesses — including churches and ministries — funding to keep workers paid and employed during the coronavirus pandemic.
The initial wave of the program provided $349 billion for loans; however, that initial funding was exhausted within only two weeks. The new legislation signed today (April 24) adds an additional $310 billion to the program and is also expected to go quickly.
“Many churches and ministries, along with many small businesses, were unable to access the initial funding through the Paycheck Protection Program,” GuideStone® President O.S. Hawkins said. “We expect this next round of funding will also be exhausted quickly. While we would never tell pastors or churches what to do, it is good that they know the options available to them through this legislation, as well as understand that timeliness is of the essence if they decide they want to pursue the loans.”
The loans under the Paycheck Protection Program can be forgiven if certain conditions are met. The loan must be used to cover payroll costs (including insurance and retirement benefits), mortgage, interest, rent or utility costs during the eight-week period following the origination of the loan. The forgiven amount may be reduced based on a formula that compares a church or ministry’s employment in pre-COVID-19 periods with the number of employees and each employee’s wage or salary in the eight-week period following the origination of the loan.
GuideStone Chief Legal Officer Harold R. Loftin, Jr. created a Q&A document that addresses common questions related to the Paycheck Protection Program and other parts of the CARES Act.
Churches interested in applying for a Paycheck Protection Program loan should contact a Small Business Administration-approved lender. Most banks and many credit unions participate in SBA programs. Since every taxpayer’s situation is unique, it is recommended that individuals consult with an accountant or attorney familiar with the unique status of ministers’ income and taxes before taking action.
Roy Hayhurst is director of denominational and public relations services for GuideStone Financial Resources of the Southern Baptist Convention®.