On Monday, I learned that thousands of pastors and ministry leaders around the United States were on Zoom calls (the new normal for millions of Americans), conference calls, and webinars learning about the government’s new Payroll Protection Program for churches, ministries, and the not-for-profit sector.
As a ministry leader, we received a direct offer to participate that came following a contact from our bank. We are faced with a similar decision as many of you. Here is the summary report from our CFO:
I received a phone call this afternoon from (omitted), Sr. VP for Commercial Banking. (He) wanted to be sure that Crown is aware of the Small Business Administration (SBA) Paycheck Protection Loan Program for which it qualifies. The written guidelines from the SBA are expected to be released either later today or tomorrow. (He) will send me a copy of the guidelines once he receives them. Some time-sensitive
information:
• The loan window will open for applications this coming Friday, April 3rd and will close in June.
• Demand is expected to be very high.
• Once the $350 billion in allotted funds are gone, no additional funds can be allocated under this SBA program.
• Expectations are for them to “sell out” quickly.
• The maximum loan would be 250% of Crown’s average monthly payroll costs based on February 15th headcount levels and adjusted for employees earning over $100K/year.
• Interest rate would be .5% APR for a 2-year rate.
• Some, but probably not all, of the loan could be forgiven if there is not a reduction in the number of employees or a reduction greater than 25% in wages paid to employees or payrolls are restored afterwards.
In terms of full disclosure, the program is being rolled out through the banks who will receive an administration fee. (Anonymous) Bank does have at least two incentives to promote the SBA loans:1) they are being paid a fee to originate and manage the loan (which can later be sold on the open market), and 2) The loans can help stabilize their customer base with government guaranteed loans and lessen the economic shock that many are reeling from.
If Crown wants to participate in this program, it will probably need to act quickly. The Crown board will need to decide before Friday if we are going to request the loan through (Bank) to have the best opportunity to receive funds. While no one is sure, it will probably take at least three weeks for funds to be disbursed.”
We qualify for approximately a $250,000 loan/grant. That is very significant to us and is worthy of a measured decision. I am sure many of you are faced with a similar decision; for some, the stakes may be much, much higher.
SOURCE: Christian Post, Chuck Bentley
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