Tips for Handling Nonprofit PPP Loan Forgiveness
The Paycheck Protection Program (PPP) is an impactful piece of legislation that was created in response to the coronavirus pandemic. Its goal is helping small organizations (fewer than 500 employees) weather the economic crisis set off by the coronavirus pandemic. Many nonprofit organizations took advantage of the forgivable loan program. A recent article from Nonprofit Quarterly offers some key advice for those that did and that are now facing the process of loan management and forgiveness.
Author Jeanne Bell draws upon an interview with senior consultants from the Fiscal Management Associates (FMA), offering the following advice:
- Loan recipients that are ready to apply for forgiveness should contact their lender to learn the specifics steps for their forgiveness process.
- Loan recipients should be aware of a number of updates released by the Small Business Administration (SBA), including the streamlined forgiveness application for smaller loans, the audit requirement for larger loans, and the fact that the details of all PPP loans are available publicly online.
- Common issues encountered by nonprofit PPP loan recipients include confusion about how to start the forgiveness process, which forgiveness application form to use, how to calculate full-time equivalent employees (FTEs), and how to account for any restricted funding received by the nonprofit.
- Beyond issues with forgiveness applications, additional issues include how to account for PPP loans on financial statements and how to communicate accurately to boards of directors and organization funders regarding the health of a nonprofit.
For further details, click here to read the article in full at Nonprofit Quarterly.