Small Business Administration Loans Update from NASAA
From Kelly J. Barsdate, Chief Program and Planning Officer, NASAA
The National Assembly for State Arts Agencies (NASAA) has received several inquiries about eligibility for SBA Paycheck Protection Program and Economic Injury Disaster loans. Nonprofit 501(c)(3) organizations are eligible to apply, as are sole proprietors and self-employed individuals. These eligibility provisions make SBA loans a potentially important resource for cultural organizations as well as creative entrepreneurs and independent artists whose businesses have been disrupted due to the pandemic.
In addition to the information supplied on the SBA website, Independent Sector has compiled a comprehensive guide to the CARES Act: How to Apply for Nonprofit Relief Funds. Drilling into this site is worthwhile because it not only explains each SBA program, it also provides links to prospective local lenders, advice on documentation to gather in advance and answers to frequently asked questions. TSNE MissionWorks, a nonprofit advisory firm, is another source of practical guidance for preparing an SBA loan application. See its Urgent Information for Nonprofits Applying for the CARES Act.
Because many small arts organizations have never before sought loan assistance, a number of organizations—including several state arts agencies—are conducting webinars that walk nonprofit applicants through an SBA loan process in more detail. If training tailored to nonprofits is not yet available in your own state, here are some on-demand offerings that your constituents may find valuable:
- Arts: Loans and Other Funding Information The Georgia Council for the Arts and the Georgia Center for Nonprofits provide nonprofit cultural organizations with how-to guidance for Economic Injury Disaster Loans and applications for the Payroll Protection Program.
- Paycheck Protection Program Loan Overview Webinar Nonprofit consulting firm Fiscal Management Associates (FMA) reviews step-by-step tips for nonprofit organizations considering applying for Paycheck Protection Program loans. FMA authored this helpful blog on Managing Nonprofit Finances During the Coronavirus Crisis, published by The Wallace Foundation.
- How the CARES Act Supports the Arts Sector This Americans for the Arts webinar helps arts groups understand the loan and grant opportunities made possible through the federal Coronavirus Aid, Relief and Economic Security Act. (A member login is required.)
The demand for SBA loans is intense and the SBA and local lenders are scrambling to iron out procedural questions, as reported by Forbes, The New York Times and other sources. A new development this week is that the SBA is growing the list of approved lenders for the Paycheck Protection Program, including some widely known tech firms, to expand access.
Business experts are encouraging nonprofits interested in a loan to apply quickly,before funds are exhausted. However, advisors also are counseling organizations seeking assistance to expect protracted approval wait times and to prepare for the possibility of smaller award amounts, given the high levels of stress on the pool of dollars currently available.
As of this writing, Congress is developing another round of COVID-19 relief legislation; supplementing the funding for SBA loan programs is among the items under discussion. NASAA continues to work with coalition advocates and members of Congress to bolster support for the arts and nonprofits in forthcoming legislation. We will keep you closely apprised of federal action in the days ahead.
