Federal Stimulus Package Could Provide Financial Assistance to Catholic Schools and (Arch)dioceses
The $2 trillion stimulus package signed into law on Friday includes a program that may allow eligible Catholic schools and (arch)dioceses to pay employee salaries and other expenses through forgivable loans of up to $10 million.
These loans could have far-reaching positive impacts for Catholic schools now facing serious financial hardships brought upon by the COVID-19 pandemic.
The Alliance for Catholic Education is working with experts to learn more about the loans. Our present understanding is that they may offer much-needed financial assistance to many Catholic schools and (arch)dioceses that are working tirelessly to provide a high-quality education in the faith to families now facing extraordinary financial burdens.
Under the Paycheck Protection Program, Catholic schools, (arch)dioceses, and other nonprofits with fewer than 500 employees may be eligible for loans of up to $10 million. If they maintain their workforce from February 15 through June 30 – and show that they have the same or more employees than the same period in 2019, or for January 1-February 29 of 2020 – the loan is forgiven and does not have to be repaid.
Schools and other nonprofits can apply for a loan up to 250 percent of their monthly payroll costs for any eight-week period between February 15 and June 30 and use the money to pay for salaries, paid sick and medical leave, insurance premiums, mortgage, rent and utility payments. If the loan is forgiven, it does not count as taxable income.
To apply, schools must contact one of the federal Small Business Administration’s preferred lenders, who can be found at https://www.sba.gov/partners/lenders/microloan-program/list-lenders. The loans will be authorized through December 31.
The government also created a second fund, called the Economic Injury Disaster Loan, that allows nonprofits to borrow up to $2 million at 2.75 percent interest repayable over 30 years. These loans, however, must be repaid and must be used to pay for different expenses than loans under the Paycheck Protection Program.
To obtain an Economic Injury Disaster Loan, schools must apply directly to the Small Business Administration at https://disasterloan.sba.gov. The loans can be used to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid because of the disaster’s impact.