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CARES Act Information

Middle Tennessee is experiencing unprecedented challenges, especially when it comes to maintaining business operations during a crisis. In response, the federal government is providing disaster relief loans under the CARES Act. Check back here for ongoing updates and detailed information on the types of loans available to nonprofits, along with application information and deadlines.

Latest Updates

PPP Update: Understanding Good-Faith Certification

To provide clarity for borrowers around the review process, the SBA recently issued FAQ 46, which states:

When submitting a PPP application, all borrowers must certify in good faith that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” SBA, in consultation with the Department of the Treasury, has determined that the following safe harbor will apply to SBA’s review of PPP loans with respect to this issue: Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.

SBA has determined that this safe harbor is appropriate because borrowers with loans below this threshold are generally less likely to have had access to adequate sources of liquidity in the current economic environment than borrowers that obtained larger loans. This safe harbor will also promote economic certainty as PPP borrowers with more limited resources endeavor to retain and rehire employees. In addition, given the large volume of PPP loans, this approach will enable SBA to conserve its finite audit resources and focus its reviews on larger loans, where the compliance effort may yield higher returns.

Importantly, borrowers with loans greater than $2 million that do not satisfy this safe harbor may still have an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance. SBA has previously stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review by SBA for compliance with program requirements set forth in the PPP Interim Final Rules and in the Borrower Application Form. If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness. If the borrower repays the loan after receiving notification from SBA, SBA will not pursue administrative enforcement or referrals to other agencies based on its determination with respect to the certification concerning necessity of the loan request. SBA’s determination concerning the certification regarding the necessity of the loan request will not affect SBA’s loan guarantee.

The SBA is extending the repayment date for this safe harbor to May 18, 2020, to give borrowers an opportunity to review and consider FAQ 46. Borrowers do not need to apply for this extension. This extension will be promptly implemented through a revision to the SBA’s interim final rule providing the safe harbor.

Source: First Horizon Bank

Economic Injury Disaster Loan (EIDL) & Grants

Economic Injury Disaster Loans

  • Nonprofits can apply for tornado and/or COVID-related disasters
  • These are loans up to $2 million with a nonprofit interest rate of 2.75%, with repayment plans up to a maximum of 30 years.

Economic Injury Disaster Advance Loans

  • Loans up to $10,000
  • Funds are available within three (3) days, and they do not have to be repaid.

Note: A nonprofit can apply for an SBA disaster loan (EIDL) AND the Paycheck Protection Program (both are through the SBA). However, the funds need to be used for separate expenses (no double-dipping) AND the EIDL amount would be subtracted from the amount forgiven in the Paycheck Protection Program.