• are either (a) an organization that’s excused of government tax under section 501(c)(3) of your Internal Funds Code regarding 1986, just like the revised (this new Code) or (b) a conflict veterans’ providers exempt below part 501(c)(19) of the Password, and you can
• have 500 otherwise fewer complete and/otherwise part-day employees (you’ll find exclusions to this limit also to brand new relevant association rules).

Amount borrowed

In case your organization was in organization regarding , the most loan is equivalent to 2.5 times the average month-to-month payroll will set you back inside the step one-seasons several months before the big date of the financing. Whether your business was not operating out-of , maximum loan is equivalent to dos.five times the common month-to-month payroll will cost you ranging from . Regular companies has one or two different alternatives. And additionally, in case your company grabbed away a financial Burns off Crisis Mortgage (talked about lower than) just after , they mortgage (effectuated by the addition of you to definitely amount to this System amount borrowed formula, although cover stays $ten billion).

“Payroll will set you back” through the sum of payment of any payment with respect to group that is a: (1) income, wage, fee otherwise comparable compensation; (2) payment getting travel, adult, nearest and dearest, scientific, or sick hop out); (3) allowance to own dismissal otherwise break up; (4) payment required for this new terms regarding class medical care benefits, and additionally insurance costs; (5) percentage of every retirement benefit; and you can (6) fee out-of state otherwise local taxation analyzed on compensation of personnel.

“Payroll costs” do not include: (1) the cash compensation of an individual employee in excess of an annual salary of over $100,000, prorated for the covered period; 4 (2) taxes imposed or withheld under chapters 21 (FICA), 22 (Railroad Retirement Tax), and 24 (payroll taxes) of the Code; (3) compensation of employees whose principal place of residence is outside of the United States; (4) qualified sick and family leave for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act.

Example 1. A 501(c)(3) was in business from . During the 1-year period before the date the loan will be made, the 501(c)(3) employed one hundred (100) individuals, each of whom cost the organization $60,000 per year in total payroll costs (salary, benefits, etc.). The maximum loan amount for this nonprofit is $1,250,000, calculated as follows: The average total monthly payments by the applicant for payroll costs incurred during the 1-year period before the loan date is $500,000 ($60, = $5,000 x 100 employees). $500,000 x 2.5 = $1,250,000.

Example dos. Same facts as above, except that the 501(c)(3) employs ninety-five (95) individuals, each of whom cost the organization $60,000 per year in total payroll costs (salary, benefits, etc.), and five officers, each of whom cost the organization $150,000 per year in total, including $130,000 of compensation to each of those five officers. The maximum loan amount for this nonprofit is $1,312,500, calculated as follows: The average total monthly payments by the applicant for payroll costs incurred during the 1-year period before the loan date is $525,000 ($60, = $5,000 x 95 employees = $475,000, plus $120, ($150,000 less the $30,000 of compensation in excess of a $100,000 annual salary) = $10,000 x 5 officers = $50,000). $525,000 x 2.5 = $1,312,500. 5

Let Uses regarding Loan Continues

The loan proceeds may only be studied for (1) payroll; (2) boss group health care positives; (3) auto Alabama loan title appeal into the mortgage personal debt; (4) rent; (5) utilities; and you can (6) interest towards almost every other loans incurred just before (along, Let Uses). The mortgage might not be familiar with prepay mortgage focus or toward payment off dominating to your a mortgage.