- Center for Nonprofit Excellence
RESOLUTION OF THE BOARD OF DIRECTORS OF[ORGANIZATION NAME HERE]APPROVING APPLICATION FOR FEDERAL PAYCHECK PROTECTION PROGRAM LOAN[MONTH XX], 2021WHEREAS, the federal Coronavirus Aid, Relief, and Economic Security (“CARES”) Act became law in early 2020, and it included a Paycheck Protection Program (“PPP”) providing approximately $350 billion in loans to small businesses suffering from the results of the COVID-19 pandemic; andWHEREAS, in December 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act) became law, extending the Small Business Administration’s ability to issue both new and “second draw” PPP?loans through March 31, 2021, to cover not only payroll costs but also rent/mortgage, utilities, covered operations expenses, covered property damage, covered supplier costs, and covered worker protection expenditures; andWHEREAS, in late March 2021, Congress passed the “PPP Extension Act of 2021,” extending the application deadline to May 31, 2021; andWHEREAS, the U.S. Treasury Department and Small Business Administration have published borrower guidance and a series of application forms for forgivable PPP loans to be?issued by SBA-approved lenders, with (a)?interest rates of 1%, (b)?maximum principal amounts to be determined by multiplying 2.5 times a borrower’s average monthly payroll; (c)?a deferment of payments for six months, and (d)?five-year terms; andWHEREAS, demand for PPP loans is expected to remain high, with funds to be disbursed on a first-come, first-served basis; and WHEREAS, our organization urgently needs to be able to continue to pay staff and to cover other costs allowed under the PPP in the coming months and could benefit from the PPP loan program; andWHEREAS, while borrowing money always involves some risk of not being able to repay, PPP loans are designed to minimize that risk; NOW, THEREFORE, BE IT RESOLVED, THAT:Our [TITLE OF OFFICE], [NAME OF OFFICER], be authorized to work with our Treasurer and staff to apply for a PPP loan as described above with [NAME OF BANK] and to sign and submit any applications, certifications, and other forms needed to secure that loan.The principal amount applied for should be as large as the PPP formula allows. Interest should be as low, and the term should be as long, as the SBA and the bank allow under then-current guidance from the U.S. Department of the Treasury.Our staff get accounting advice as needed to ensure that (a)?the PPP loan application is complete and timely; and (b)?any reports needed to establish the organization’s right to have that loan forgiven be prepared and submitted.The funds borrowed be used for costs allowed under the PPP program, including payroll, rent/mortgage, utilities, covered operations expenses, covered property damage, covered supplier costs, and covered worker protection expenditures. ................
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