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Resilient Leadership Update #4 - The CARES Act Special Edition

Note: Please be sure to forward this email to anyone in your church who might be involved in reviewing or approving a potential loan. It will be important to prepare your church while also following along as specific guidelines are rolled out later this week. We'll do our best to keep you informed. We also highly recommend you stay in close contact with your licensed legal, tax, and accounting advisors as they can provide information specific to your situation and circumstance.

Don't forget to visit our COVID-19 Resource Center for curated links to helpful resources as well as monitor Giving365 for the latest practical guides to help you lead through this unprecedented time of ministry.

How can my church benefit from a CARES Act forgivable loan?

That is the question on the minds of most pastors and church leaders after the passage of the $2 trillion relief package. It is top-of-mind at Horizons as well. This special edition of Resilient Leadership is focused solely on answering that question.  
Attorneys and Public Accountants are still studying the bill and awaiting guidelines from the Small Business Administration (SBA) and the U.S. Treasury on how the CARES Act will be administered. However, it appears that churches and non-profits may be able to borrow money that could be completely forgiven if they maintain their previous 12-month staffing levels through June. 
Tomorrow’s (March 31) edition of Resilient Leadership will include an in-depth interview with attorney Jeff Watson, who will be sharing his advice on how churches can prepare to fully participate in the benefits of the CARES Act. 
WhitleyPenn (, a Texas-based accounting firm has outlined their understanding of key provisions of the Coronavirus Aid, Relief and Economic Security (CARES) Act into a few pages. For those of you who are up for it, you can download all 880 pages of the act. 
The key statement in the WhitleyPenn summary is this “The Act now allows any business or public or private nonprofit organization with 500 or fewer employees that has been substantially affected by COVID-19 to borrow under the SBA 7(a) program.” 
Key Provisions according to WhitleyPenn:

  • Eligible churches and non-profits will be able to borrow up to 2.5 times their average monthly payrolls and benefits up to $100,000 per employee.
  • Funds can be used to cover payroll, benefits, employer payroll taxes, rent/mortgage payments, utilities and interest on existing debt. 
  • The SBA will have to issue guidance on how housing allowance will factor into the calculations.
  • If the church or non-profit meets the employee retention requirements up to 100% of the loan can be forgiven.
  • The loan pool is $350 billion with a maximum loan per applicant of $10 million.
  • The period during which the program applies is Feb 15, 2020, through June 30, 2020.
  • Express loans (36-hour approval) may be granted for loans up to $1,000,000.
  • Borrower and lender participation fees in the Paycheck Protection Program are waived but lender servicing fees apply up to 5%.
  • Borrowers are required to make a good faith effort to document that the loan is necessary due to economic conditions caused by COVID-19. Borrowers will need to demonstrate that the loan was used to retain employees, maintain payroll, and pay rent and utilities. They are not permitted to receive duplicate payments for the same purposes under a different SBA program.  
Remember the SBA and the U. S. Treasury have not written the guidelines under which this loan program will be administered. Our current understanding will be impacted by these guidelines.
What can you do now?
  • You can ensure your 2019 Financial Statements are complete and your first-quarter financial statements are prepared as soon as possible.  
  • You can review your church’s polity on receiving a loan and take steps toward notices of meetings that may be required. If a church vote is necessary, think about how you will accomplish that during social distancing using mailed ballots or online meetings (such as Zoom) that can accommodate large numbers of people. Determine if approval is required to apply for the loan or just to sign documents. 
  • You can locate an SBA approved bank and let them know you would like to apply. Ask them to immediately provide you loan documentation requirements once published by the SBA. 
  • Keep reading Resilient Leadership for updates on the CARES Act and other topics related to Making Disciples and Funding Ministry in this time of social distancing. 

Together, we are better. 


Joe Park

P.S. Horizons is working around the clock to support you during this time of social distancing. To stay up to date and have access to the latest resources, sign up for a FREE Giving365 account. When you do that, you’ll be the first to know when new ideas, strategies, and resources are available to help you lead strong.

Horizons Stewardship is a church and nonprofit fundraising consulting firm. We will continue to provide publicly available information we believe is trustworthy and of interest to our contacts. Horizons’ intent is only to share information. None of our content should be considered professional legal, tax, or accounting advice. Horizons Stewardship is not liable for any information provided by us from a third-party as this information may be changed, updated, or removed. Please consult with your legal, financial, and/or tax planning professional who can guide you toward your best course of action related to any business matters of your organization.

CARES Act Resources

CARES Act Resources

Upcoming FREE Webinars 

Tuesday: March 31, 10am CDT

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Wednesday: April 1, 10am CDT

Electronic Recurring Giving: Needed Now More Than Ever! 
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Thursday: April 2, 10am CDT

Church Internal Financial Controls During Social Distancing
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