The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which become law March 27 at a cost of $2 trillion, includes several economic assistance measures for individuals and small businesses. One component of the new law is the creation of a Paycheck Protection Program (PPP), being implemented by the Small Business Administration with assistance from the Treasury Dept.

According to the Treasury, small businesses, including eligible nonprofit organizations, veterans’ organizations, and tribal businesses, as well as self-employed individuals, are eligible to apply for $349 billion worth of PPP loans to pay up to eight weeks of payroll costs, including benefits. Economic Injury Disaster Loans (EIDL) of up to $10,000 are also available, and although described as loans, the Treasury indicates that these advances will not have to be repaid.

Demand for the PPP quickly outstripped the amount allotted by Congress, and the program ran out of funds April 16. However, many religious congregations around the country have already applied for the program, and if adaditional funds are allocated, more may choose to do so by the deadline of June 30.

The terms of the PPP state that the “loans” will be fully forgiven when “used for payroll costs, interest on mortgages, rent, and utilities,” with the additional stipulations that at least three-quarters of the money must be used for payroll, and that employers must either retain or quickly rehire employees and maintain both headcount and salary levels. Businesses are considered “small” if they have fewer than 500 employees, or meet other criteria under section 3 of the Small Business Act (15 USC 632). SBA.-gov describes additional terms and lists participating lenders.

An additional clarification of rules for faith-based organizations, including houses of worship, states that “faith-based organizations are eligible to receive SBA loans regardless of whether they provide social services.” For the purposes of the CARES Act and PPP, the SBA is declining to enforce its regulations under 13 CFR subsections 120.110(k) and 123.301(g), which specifically exclude businesses “principally engaged in teaching, instructing, counseling or indoctrinating religion or religious beliefs.” A full set of FAQs is available online (https://www.sba.gov/document/support--faq-regarding-participation-faith-based-organizations-ppp-eidl).

Although the FAQ for the program state that “a faith-based organization that receives a loan will retain its independence, autonomy, right of expression, religious character, and authority over its governance,” nondiscrimination provisions do apply for the term of the loan. The SBA explains, “Receipt of a loan through any SBA program constitutes Federal financial assistance and carries with it the application of certain nondiscrimination obligations”; however, these obligations apply only for the duration of the loan.