Grace and peace to you my fellow members of Immanuel…
This month I want to share information concerning the PPP program, that you may have heard about in the news since the COVID Pandemic entered our lives. The PPP is part of the Federal stimulus program and is a loan designed to provide a direct incentive for small businesses and Non-profits (such as the church) to keep their workers on the payroll and help with certain church operational costs. The SBA (Small Business Administration) is managing these loans through local banks and will forgive loans if all employee retention criteria are met, and these funds are used for identified eligible expenses. We are utilizing Sauk Valley Bank where we currently have all of our church accounts.
I brought this to the Council recognizing that although we had approved a budget for 2020, it was based on us experiencing a normal year of revenue and expenses. As we all know it has not been a normal year. There is quite a process that was completed to determine how much we as a church would qualify for. The application calls for us to look at the total costs of our payroll, health insurance, retirement fund contributions and payroll taxes that were paid out in 2019. For that time frame we had an average monthly payroll expense of $9,240.00. You then multiple that figure by 2.5 which had us eligible for $23,100. After presenting the information and having a good discussion, the Council approved, proceeding forward with our application for a PPP loan following a unanimous vote.
I can hear some of you asking the question, so if it is a loan, we have to pay it back with interest, right? Normally, that is how loans work, however, and thankfully the PPP loans have a forgiveness component to them.
In short, the SBA and local bank will forgive the loans and interest if all employee retention criteria are met, and the funds are used for the eligible expenses that I mentioned above.
We must use the funds within 12 weeks after receiving the monies. We must use at least 60% of the monies for the payroll expenses at minimum ($13,860.00). After that, we can utilize the remaining 40% to help off set our building utility costs (gas, electric, internet), or utilize it all on payroll expenses.
It may sound complicated, however, actually the bookkeeping part is pretty simple. I have been discussing with Jill our process to ensure that we have the necessary documentation to submit with our loan forgiveness paperwork at the end of the time limits and satisfy our obligations. We are “Very Confident” and have every reason to believe that the loan will be 100% forgiven.
I want everyone to understand very clearly, that we are not currently short on funds, and are on pace to meet our financial obligations. And to that we “Thank You” all for your on-going support of the mission and ministry of Immanuel. The receipt of this money will allow us to have a “cushion” or “safety net” if you will for the remainder of the year. It will allow us to end the year in a good financial position, as well as address some of the cost that we will be dealing with as we move forward with getting the church back up and open for services and other uses.
As always, if you have questions, please feel free to reach out with an email to the church and I will be more than happy to get back to you with the answer to your concern.
“Christs love makes the Church whole. His words evoke her beauty. Everything he does and says is designed to bring the best out of her.” Ephesians 5:26 (MSG)
Bill Wescott, Treasurer