Coronavirus Aid, Relief and Economic Security (CARES) Act
Helps Nonprofits Weather the Storm

The CARES Act passed in congress last week enables nonprofits of all sizes to apply for a Small Business Administration (SBA) Loan. Of crucial importance is the provision to make a portion, or all of these loans forgivable if the nonprofit keeps staff on payroll between March 1st and June 30th. This provision may essentially turn the loan into a general operating support grant to meet costs such as payroll, health insurance, facilities costs and fixed debt service.

This program is highly worth investigating, yet nonprofits who have not applied for loans in the past may find this intimidating. Here are a few key points and links to consider and help navigate the process:

  • The loan is obtained directly from banks so you can work with your primary banking partner (contacting them will be your first step)
  • Important pieces of information to collect and take to your banking partner can be found below.
  • Nonprofit must have been in operation on March 1, 2020 and had paid employees
  • Nonprofit was impacted by COVID-19
  • Collateral needed: none
  • Personal guarantees: none
  • Loans can be for up to $2 million at nonprofit interest rate of 2.75%
  • Repayment terms may be up to 30 years
  • Terms of the loan will vary depending on the size of nonprofit and ability to pay
  • All or a portion of the loan may be forgiven provided you maintain employment
  • PPP Borrowers Information Sheet

CARES Act: What Nonprofits need to Apply for
Small Business Administration (SBA) Loans
While nonprofits wait for official loan application process to begin (remember to check with your banker), there are documents nonprofit leaders can gather now to make the application process smoother:

1.  2019 IRS Quarterly 940, 941, or 944 payroll tax reports
2.  Last 12 months of Payroll Reports beginning with your last payroll date and going backwards 12 months.

  • Payroll report must show the following for the time period above:
  • Gross wages for each employee, including the officer(s) if paid W-2 wages
  • Paid time off for each employee
  • Vacation pay for each employee
  • Family medical leave pay for each employee
  • State and Local taxes assessed on the employee’s compensation for each employee 

3.  1099s for 2019 for independent contractors that would otherwise be an employee of your business • Do   NOT include 1099s for services
4.  Documentation showing total of all health insurance premiums paid by the Company Owner under a group health plan. • Include all employees and the company owners
5.  Document the sum of all retirement plan funding that was paid by the Company Owner (do not include  funding that came from the employee’s out of their paycheck deferrals)

  • Include all employees, including company owners
  • 401K plans, Simple IRA, SEP IRAs.

For additional nonprofit response and resource information regarding COVID-19, please visit the Montana Nonprofit Association at: