The CARES Act: Why & How Nonprofits Must Secure Funding

When nonprofits suffer, we all suffer. Nonprofits are a source of stability for communities and families, and for centuries, they have provided resources that would otherwise go overlooked. Through meaningful programs and initiatives, citizens and businesses continue to give back as those who need the most help continue to withstand difficult times. This cycle is a part of what helps the economy to run smoothly.

Today, in the wake of the COVID-19 pandemic, nonprofits are taking a hard-hit, impacting the wellbeing of the economy as a whole. While federal, state and local governments are providing support in many ways, organizations on the ground — nonprofits — that know their communities best are looked to as staple frontliners, providing food, domestic violence shelter, financial assistance, medical equipment, mental health resources, and other emergency services and supplies. Unfortunately, the growing demand for additional help at this time is being met with tremendous limitations, as nonprofits are not only held to respect social distancing guidelines but are also running low on funding, space and volunteers to move their mission-driven work forward.

A critical component in the physical, emotional and financial fight against the coronavirus crisis, organizations of the charitable sector of our nation joined forces to ensure that when Congress passed an act to provide COVID-19 relief and economic assistance to small businesses that they would include nonprofits. On March 27, 2020, the CARES Act was passed, which provides significant funding for governments, businesses, hospitals, schools, and social support programs, among many other things.

See the ways you can secure funding during COVID-19 below:

Paycheck Protection Program

• Emergency loan program for nonprofits and for-profit organizations to secure funds to pay staff and operating costs for 2 months, and secure full loan forgiveness under certain circumstances. Must have 500 or fewer employees. Applicants can receive the lesser of $10 million or 2.5 times the average total monthly payroll costs from the one-year period prior to the date of application.

• How do you apply? You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. You should consult with your local lender as to whether it is participating in the program. Learn more here.

• See Paycheck Protection Program Options

EIDL & Emergency Grants

• Existing Economic Injury Disaster Loan (EIDL) program provides private nonprofit organizations and small businesses with low-interest loans of up to $2 million. This program applies looser credit standards and creates a rapid grand procedure. EIDL advances of $10K paid within 3 days.

• How do you apply? For emergency EIDL Grant, apply here now. For normal EIDL loans, complete SBA Form 5 online.

SBA Express Bridge Loans

• Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25K quickly. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue and used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. Learn the procedures applicable to this program here.

Local Assistance

SBA works with a number of local partners to counsel, mentor, and train small businesses. The SBA has 68 District Offices, as well as support provided by its Resource Partners, such as SCORE offices, Women’s Business Centers, Small Business Development Centers and Veterans Business Outreach Centers. Be sure to use the SBA’s Local Assistance Directory to locate the office nearest you.