Guidance has been provided by Wespath and other organizations providing summaries of the provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Act contains many provisions for assistance to individuals and organizations. After careful consideration of the available resources and based on our current understanding of the CARES Act, the following steps are recommended to NC Conference local churches at this time. We hope this guide will be helpful as you navigate this rapidly changing environment.
1. Apply for assistance through the Small Business Administration (SBA)
The CARES Act provided funding for 501(c)3 organizations through the Paycheck Protection Program (PPP) loan and Economic Injury Disaster Loan (EIDL) programs. Consider the offerings of each and decide which is best for your church. Small churches may prefer the EIDL program but larger churches may benefit more from the provisions of the PPP.*
PPP forgivable loans for business and 501(c)3 organizations (including churches) to cover payroll expenses, including benefits, for a period of time. Loans made through this program are limited to 2.5 times the average monthly payroll and benefits (up to $100,000 per employee). The loan is intended to keep people employed and will be forgivable to the extent the number of employees at June 30 equals or exceeds the number of employees prior to the COVID-19 pandemic. Each church should research this program and potentially apply for a forgivable loan. Some steps to get you started are:
- Call your bank to determine if they are an SBA-approved lender in this program. If so, ask them what you need to do to get an application underway. If they are not, check the SBA website for help finding approved lenders and get in touch with a lender.
- There are companies who can assist you in preparing your application to submit to an approved SBA lender. If you prefer to pay a service to do this for you, email us for a service recommended by other churches or research one on your own. Please be mindful of doing diligent research as there will be individuals using this as an opportunity to scam businesses and churches.
- There are companies who can assist you in preparing your application to submit to an approved SBA lender. If you prefer to pay a service to do this for you, email us for a service recommended by other churches or research one on your own. Please be mindful of doing diligent research as there will be individuals using this as an opportunity to scam businesses and churches.
- Begin gathering required approvals. Follow your church’s financial policies to determine what is required by your church to request this forgivable loan. As this is not a mortgage, a special charge conference is not required by the Book of Discipline. If your church does not have written financial policies, obtain approval by your pastor and finance committee.
- Begin gathering needed information for the application process. The first version of the PPP loan application is available on the SBA website. To complete the application and verify the information to the SBA lender, you will likely need at least the following information for the application when the final application becomes available:
- Organizational Information
- State-approved Articles of Incorporation, if incorporated
- 501(c)(3) determination letter from the IRS (get yours at umgroupruling.org)
- Name and Address of potential Signers for the Good Faith Certificate (Loan).
- Financial Information
- Internal Financial Statements (whatever you have)
- Balance Sheet – December 31, 2019
- Income Statement – Jan 1, 2019 – Dec 31, 2019
- Internal Financial Statements (whatever you have)
- Bank Information
- Information for the bank account where the funds should be deposited.
- Payroll information:
- 2019 Quarterly Federal Tax Filings (941s), if any
- All W2s issued in 2019
- All 1099s issued in 2019
- For the period of 3/1/2019 – 2/29/2020, summarize by:
- Payroll Register
- Employer portion of Healthcare Insurance
- Employer portion of retirement benefit
- State or local taxes assessed and paid, if any
- Organizational Information
- Remember that timing is essential for receiving a PPP forgivable loan through the CARES Act. A significant amount of funding was made available for this process, but it will not be enough for all small businesses. Funding will be allocated on a first-come basis. The application process is expected to be available beginning Friday, April 3, 2020. There is an expectation of express approvals utilizing a 3-day turnaround time. Actual procedures are still being developed by the SBA so actual time to apply and/or to receive the funding is not certain at this time, but the projected dates should be accepted as deadlines.
2. Apply for a COVID-19 Mission grant from the NC Conference Missions Team
For emergency spending related to direct needs resulting from the impact of COVID-19 on our local communities (available to all NC Conference churches while funding lasts). To apply, complete an application for assistance on the COVID-19 Response Assistance Request Form for Churches.
3. If you are not approved for a PPP loan, apply for financial assistance through the NC Conference COVID-19 Response Fund.
Assistance may be provided through the Conference COVID-19 Response Fund to assist churches and ministries impacted during this time of unprecedented crisis. Through a joint effort of the Conference Council on Finance and Administration, Insurance Committee, and Board of Pension, funding has been made available to assist churches with varying needs during the crisis to include mission support, payroll, health insurance premiums, church pension contributions, utilities, etc. Please note that the best method for assistance will be to investigate option 1 first. If you are not approved for a PPP loan or if you have needs after the PPP loan funds have been expended, apply for assistance through the COVID-19 Response Assistance Request Form for Churches.
4. Encourage persons who have been laid-off due to the COVID-19 pandemic to apply for unemployment benefits.
The CARES Act temporarily expanded eligibility and benefits under unemployment programs so those who may not have been eligible previously could be approved. To apply for benefits, contact the North Carolina Division of Employment Security – des.nc.gov or (888) 737-0259. While you may file a claim over the phone, due to higher than normal volume, it is recommended you do this online, a process that will take approximately 20 minutes. Under normal circumstances, there is a one week waiting period for benefits, but this has been waived due to this event, and if someone qualifies, it will take about 2 weeks for the first payment to arrive. (Note that if your church applies for a PPP loan, you may be able to use the forgivable loan to bring back employees previously laid-off by the church before June 30.)
5. Stay informed and connected
Learn of updates and changing priorities in response to the COVID-19 pandemic. Sign up for Conference Communications and read your email to be informed of updates to guidance and procedures for obtaining assistance. If your church is not in need of assistance, consider ways you might support your UMC family and give to support the needs of other churches through the COVID-19 Response Fund.
6. Remember that God is with us
Even now as we navigate these uncertain times, we are joined together as one in Christ’s Church and through our connection in The United Methodist Church. Contact your District Superintendent for support and assistance in finding ways to continue to grow in ministry with a hurting world during this time.
*Please consider if a Paycheck Protection Program loans or the SBA’s Economic Injury Disaster Loan (EIDL) might be best for your church (comparison chart here). The EIDL provides $10,000 cash advance that does not have to be repaid but any amounts over that will need to be repaid and amounts over $25,000 must be secured. If your church has already applied for EIDL assistance, you can request that it be reclassified as a PPP loan if that program is best in your situation. While $10,000 may not be the best option for larger churches, it may fit a small church well.
*An alternative to the Paycheck Protection Program or EIDL programs might be the Employee Retention Credit program. This program will provide credit after employees return to work so it will not help provide cash flow relief soon. Churches who may not qualify for the PPP or EIDL programs should research the Employee Retention Credit Program.