Dear CMO and School Leaders,
All of you, your school communities, and your families are in our thoughts. We know there is so much you are carrying, so we will continue to reach out with resources that may help lighten the load.
Today, we want to update you on an important new funding opportunity through federal legislation. If your charter organization did not receive funding through the initial round of the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL), you have another chance to obtain substantial, forgivable loans.
On Tuesday, April 21, the U.S. Senate passed a $484 billion coronavirus aid deal, including additional funds for the PPP and the EIDL. We expect the legislation to be signed into law by the end of this week.
In the initial round of funding, 1.6 million companies secured $349 billion in PPP funding, and the program ran out of funds in less than two weeks. The $17 billion that had been allocated for the EIDL program was exhausted as well.
But because of the new legislation, eligible charter organizations that were left out of the initial round of funding have another chance to secure loans. The new funding will once again be first come, first served, so we encourage you to act now if you have not already been approved for these loans; it is expected that this new funding for PPP and EIDL will be exhausted very quickly again. Below, we have included instructions and information on how to do just that.
- If your organization applied for PPP funding and you were not approved, reach out to your lender to check on your lending status and ensure your application will be processed as soon as the PPP is open again.
- If your organization did not apply, reach out to your lender as soon as possible to start the application process. Even with additional funding, it is likely that not every qualified applicant will receive loan proceeds under the PPP; like the previous round of funding, funds are once again first come, first served.
- EIDL applicants who have already submitted their applications will continue to be processed on a first come, first served basis. Once the legislation is signed into law later this week, we expect the Small Business Administration (SBA) will re-open the online portal to allow other eligible organizations to apply for the first time.
- If your organization was approved for funding through both programs in the first round of funds, no further action is required or needed. Your organization cannot receive more funds through this round.
We’ve included additional information on the PPP and EIDL below. Please also visit https://newschoolsforneworleans.org/sbafunding/.
Paycheck Protection Program (PPP)
Does this new legislation change anything about the PPP?
Generally, no. The PPP is still open to all nonprofits with 500 or fewer employees, and covered costs, allowable loan amounts, eligibility requirements, PPP loan forgiveness terms, maturity date, and interest rates have not changed from the first round. Also remaining the same, businesses that receive an EIDL can later refinance it into any PPP loans they receive, offering a chance to lower the interest rate. A single organization cannot apply for more than one PPP loan, however. This Sample Calculation Document from the Jewish Federations of North America can help you determine the loan and loan forgiveness amounts for which your organization may be eligible. The SBA’s PPP Borrower Information Sheet also provides helpful answers to specific, detailed questions.
How do I apply for a loan through the Paycheck Protection Program?
If you have not already applied for the PPP, review the most recent application form from the U.S. Treasury Department. Once you have the information described in the form, you should contact your bank. If your bank is not an SBA-approved lender, you can find one by plugging your zip code into an online tool on the SBA’s website.
My primary bank won’t accept my PPP application because I don’t have a business account with them. What should I do?
Many banks limited applications to customers with preexisting relationships. However, many, but not all, smaller community banks and credit unions are accepting applications from new customers. Also, the new funding bill includes $60 billion for lenders with less than $50 billion in assets, giving small community banks a carve-out that will help them serve smaller organizations. If you are having trouble with your bank, we recommend you reach out to one of these smaller community banks.
My bank never responded to the application I filed before the initial $349 billion was exhausted. Should I apply again?
Nearly 80% of the small businesses that applied for a PPP loan were still waiting for an answer as of April 17, the day after the program ran out of money, and many didn’t know where they stood in the process. Banks process loans on a first come, first served basis and many continued accepting applications after the program’s initial funds were exhausted. Organization leaders should contact their banks immediately to ensure their application is still in line and check where they stand in the process.
Economic Injury Disaster Loans (EIDLs)
Under the initial round of CARES Act funding, the EIDL included an opportunity to receive a $10,000 advance within three business days of application. The $10,000 loan advance will not have to be repaid, essentially turning the $10,000 into a grant. This opportunity is also available through the new round of EIDL funds.
How do I apply for EIDL funding?
The SBA operates an online portal where you can upload business documents and apply for a loan. This portal will not be active until the new legislation becomes law later this week.