Conference, Many Churches, Receive Paycheck Protection Loans

Conference, Many Churches, Receive Paycheck Protection Loans

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The Southern New England Conference has received a $718,000 loan through the federal Paycheck Protection Program, which will be forgivable if it is used for salaries and utilities for the next eight weeks, and - as required - no employees are laid off between now and June 30.

The amount of the loan was derived from a formula that is 250% of payroll for the eight week program.

The Conference is currently seeing a loss of income due to the temporary closing of its retreat centers and the cancellation of programming. It is early in the year to know whether the Conference's income from giving by churches will also decline, but Board and Staff are assuming it will given the pandemic-caused recession.

"The loan gives the Board of Directors welcome flexibility as they navigate uncertain economic times," said Dawn Hammond, Associate Conference Minister for Policy and Finance.

The Conference is currently surveying churches to find out how many applied for loans through the program, and what results they have seen. So far, 138 churches have reported applying for loans: of those, 49 were approved, 66 were not approved, and 17 have not as yet gotten an answer.

The Conference notified churches of the program, which was rolled out quickly by the federal government in response to Covid-19. Churches had mixed results depending on the speed of their applications and the response of their individual banks.

"Final instructions didn't come out until the night before the program was due to open," Hammond said. "The flood of applications was more than some banks had the capacity to deal with.  I heard from one local church leader that their bank simply posted a web notification saying that they were not accepting applications due to the overwhelming demand. Another said that they were not told that their application was incomplete until after all funds had been expended."

More funds were added to the program this week. Hammond said churches with concerns for their budgets should consider applying. She gives the following advice:
  • Churches that applied but were rejected should contact their banks right away to find out why. If the bank simply ran out of funds, they may be able to get in the queue for the next round. If the banks need additional documentation, churches should work to provide that as soon as possible.
  • Churches should regularly follow up with their banks, to find out if the application is complete and to get updates. Given the volume they are dealing with, some bankers may not be proactive about communicating with applicants.
Hammond said anecdotal information shows that banks for the most part are working with existing customers, so churches may not have much luck trying to find another bank now to apply for a loan.

Additional information on how to apply can be found here.

Churches may also be interested in reading a memo from United Church of Christ General Counsel Heather Kimmel, regarding questions about the separation of church and state when it comes to this program. In it, she writes:

"The programs currently being promulgated by Congress make funding available to churches in ways that it has not historically been available. Churches are encouraged to carefully consider the implications of accepting funding from the government before applying for relief under the CARES Act. These implications include both the utility of the government program for the church, and the impact of government regulation on the church."

"It is unlikely that there is a constitutional problem with churches being eligible for funding under the CARES Act. The CARES Act does not promote religion; it treats religion the same way it treats other organizations and it does not prefer one religion over another. The purpose of the Act, which is limited in time and by funding, is to stimulate the economy as whole in response to a national emergency."
 

Author

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Tiffany Vail

Tiffany Vail is the Associate Conference Minister for Communications for the Southern New England Conference of the United Church of Christ. 

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