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The world has changed since our original Coronavirus blog post on March 7. Many jurisdictions have imposed some level of quarantine requirements. Travel is not recommended. Financial markets have fallen dramatically. Most fundraising events have been canceled or postponed.

No doubt, your concerns about the financial stability of your nonprofit have grown. You may face increased demands or dislocation of your normal programming, but you are also having to abandon in-person fundraising events.

One new option is available. The Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President. That paves the way for state governors to request that their states be added to the list of declared Disasters, allowing affected businesses—including nonprofits— to secure long-term, low-interest loans. While the exact coverage of these new loans remains uncertain, you may want to explore them as one source of back-stop funding.

We hope the information below will help you seek some financial relief, giving you the funding and breathing room to take additional steps to help your organization achieve stable footing in uncertain times. When seeking financial relief, be sure to include money for risk management. Now more than ever, you need to become more agile in the face of uncertainty.

 

What is an SBA Economic Impact Disaster Loan (EIDL)?

The EIDL program is intended to “provide the necessary working capital to help small businesses [and private nonprofits] survive until normal operations resume after a disaster. The SBA can provide up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred.” Interest rates on loans are determined by law and cannot exceed 4%. The term of a loan can be up to 30 years. You can visit the website here for additional information.

 

What’s My First Step to Get an EIDL?

Check the SBA website here to see if your state is on the list of declared Disasters specifically for “Coronavirus (COVID-19).” Type your state in the search box under “Current Declared Disasters” and hit the blue “Filter” button to see if your state has submitted their disaster declaration and been accepted by the SBA. If it has, read on to see how to apply for a loan. If your state doesn’t appear, reach out to your governor’s office to ask them to apply for inclusion.

 

My State has Declared a Coronavirus Disaster. How do I Apply for an EIDL?

There is a fairly simple 3-step loan application process for your nonprofit to follow.  The SBA website has a helpful process diagram and documentation checklist. Because of high website demand on the SBA site, we are including their PDF document here. When considering your application, consider the revenue losses you’re incurring or expect to incur (decreased programmatic revenues, decreased fundraising, etc.). Also consider the costs you may incur: including special precautions you must take now to provide services, remote work costs, extra computer costs, and costs relating to risk management. If you need help in quantifying these costs, reach out to us.  Now more than ever, we want to help you thrive.

Also, make sure you consult our Coronavirus Nonprofit Risk Management Resources page regularly. We intend to update it every day.

 

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