The interim funding bill (H.R. 266) passed the U.S. Senate on Wednesday, April 21. We shared this in an earlier alert, but here are the key details on appropriations in that bill:
- Provides a total of $484 in new spending, including $310 billion in new money for the Paycheck Protection Program.
- $60 billion of that amount is earmarked for smaller lenders. Half ($30 billion) will go to community development financial institutions (CDFIs), and to small lenders with less than $10 billion in assets.
- Adds $50 billion more to the Economic Injury Disaster Loan (EIDL) program, as well as $10 billion to the EIDL emergency grants program.
- An additional $75 billion will go to hospitals and $25 billion for testing, split between the states and federal government.
The U.S. House of Representatives is scheduled to vote today, (Thursday April, 23) on the interim funding bill. It is unclear whether Representatives will be able to make statements on the floor. NAO has been working with national allies to have representatives insert a statement for the record that acknowledges the issues and concerns of the nonprofit community
Yesterday, Representative Carolyn B. Maloney (D-NY) led 14 members of the New York delegation in asking the Small Business Administration (SBA) to expand eligibility parameters of the Paycheck Protection Program (PPP) so that nonprofits and cultural institutions, regardless of size, can participate in this program. Read the release and letter
We wrote to you all earlier both about the PPP pandemonium
and lack of information
on who exactly got these loans in the first round. The advice that we are giving nonprofits is to seek clarification now (before the SBA opens its portal again) that their applications have passed all internal scrutiny of their lenders and banks are prepared to upload their applications without further processing or complications.
While the statistics on who got these loans is not available, we did want to understand the successes and challenges nonprofits had with the PPP. On Monday, we launched a Pulse Poll to try to get a sense of your experience with the program and we collated your responses this morning. Thank you to the 149 organizations that responded.
From that 149, only 12 indicated that they did not apply for PPP at all. Of the 137 that applied for PPP:
- Only 42.3% (58 of you) received either loan documents or a Capital Access Financial System (CAFS or E-Tran) number from your lender;
- Of the 79 organizations that applied but did not receive loan documents or an E-tran number, 93.7% are planning to submit for the PPP when it becomes available again.
As is always the case with our community of nonprofits, you were very forthcoming when we gave you space to give your narrative feedback on the program. While we can’t print all of your feedback both due to space considerations and our “bleeper” button might break (!), we did want to give you a sense of what others experienced. Here are a few choice quotes:
“I feel our success in receiving the loan/grant was due in large part to the quick action of our bank.”
“At our bank, the application was not available online so far as I could tell. Applicants had to request the application. I emailed the bank to request an application, and I received no reply.”
“The primary problem we faced was that our bank took two weeks to get their application portal set up and ready to accept applications. By that time the initial funding ran out. They continued working on our applications and we are hoping it is all ready to go for the second round of funding.”
“It was a stressful process with lack of information from the government and from lenders, but our banker was proactive in getting us the information we needed. Still, it took quite a while and we were approved at the last minute right before funding ran out. I know of several deserving nonprofits that did not get funds and was upset to hear about the large corporations that received large loans, taking money away from small local businesses and nonprofits.”
“Small businesses and non-profits that I personally know of that could survive this crisis with just a small amount of PPP- $25K to $100K – don’t have a chance without it. Many of them also have had to close the doors leaving employees that qualify for unemployment but can’t get in the system. Completely caught in the trap of government restrictions and all facing loss of their business or job, then their homes and much more.”
“We need these funds to survive this!”
The federal government rollout of this program was problematic with final guidance to lenders being handed down at the last minute. The process to apply was further complicated by the different approaches lenders took with their clients. So much of the success of an application depended on the preparations and processes banks put in place to ease the burden and get the documents processed quickly.
We are hopeful that the second round of funding, likely to open either tomorrow or next week, will be smoother. Many of you have begun asking how these loans can be forgiven. Official guidance has not yet been handed down by the SBA to the lenders, but NAO is tracking this closely and will be offering a special webinar on PPP Loan Forgiveness as soon as we know we have information and experts that can speak with authority on that.