Important Information for Private Schools Regarding the Federal Paycheck Protection Program
As we speak with Nevada’s private school leaders, educators and families this week, our gratitude and appreciation for their leadership in this health emergency grows each day.
The $349 billion Paycheck Protection Program from the Small Business Administration is proving a crucial lifeline for private schools to keep operating during this time. It is a forgivable loan program that is available to nonprofits and businesses, including private schools. Organizations must apply through their banks and financial institutions.
Given the great demand for the program, we are strongly encouraging schools to apply today, April 3.
Organizations that are eligible for this program include nonprofit organizations and businesses that have under 500 employees; however businesses in specific industries that have more than 500 employees but are considered small according to SBA Size Standards might still be eligible.
In order to get the loans forgiven there are rules regarding how the money must be spent. In addition, the payroll provisions contain requirements that businesses must maintain staff and payroll for the loan duration. This linked document contains crucial details you will need to reference.
Program documents hold specific instructions for faith-based schools. Of importance: schools may not use the money to pay a priest, rabbi or clergy, or the mortgage on the sanctuary. The money can be used for school payroll costs and school rents/mortgage/utilities. We encourage you to be conscious of the percentages allowed for the latter mentioned expenses.
In addition, according to the interim rule, schools that accept SBA loans/grants will not be subject to intrusive action or regulation by the SBA related to practices connected with their religious activities, including employment.
The interim rule is also valuable in satisfying potential issues of government funding religious entities directly for religious activities, which is not allowed under the First Amendment as interpreted by the US Supreme Court, and the inclusion of RFRA addresses the issue of government intrusion into the affairs of religiously affiliated entities.
One issue not addressed by the interim rule relates to schools that wish to remain entities which do not accept government funds. We recommend that schools who wish to remain such, but need the SBA loan/grant to keep the school going, create a company document approved by your board indicating that this is one-time emergency relief funding occurring during a national emergency and that your action in accepting the SBA loan/grant in no way indicates a change in their operating procedures or mission.
Again, we encourage schools to act swiftly. If you have any questions or need please don’t hesitate to reach out to me.