The brand new available financing size is according to research by the nonprofit’s “payroll will set you back” and that is capped in the $ten,one hundred thousand,100000

Loan amount

Whether your organization was in business out-of , the maximum loan is equivalent to 2.5 times an average month-to-month payroll costs during the step 1-seasons period before the day of one’s mortgage. If your organization was not operating out of , maximum financing is equivalent to 2.five times an average month-to-month payroll will cost you anywhere between . Seasonal businesses provides one or two different alternatives. Also, if your organization took away an economic Injury Emergency Financing (discussed less than) immediately after , they mortgage (effectuated adding that total the foregoing System amount borrowed calculation, however the cap stays $ten mil).

“Payroll can cost you” are the sum of payment of every settlement regarding personnel that is a: (1) salary, wage, payment or equivalent payment; (2) payment to possess vacation, parental, loved ones, scientific, or ill exit); (3) allotment having dismissal otherwise separation; (4) percentage you’ll need for the fresh new specifications from category medical care gurus, including insurance costs; (5) percentage of every old age work for; and you can (6) fee of condition otherwise regional income tax examined toward payment away from teams.

“Payroll costs” do not include: (1) the cash compensation of an individual employee in excess of an annual salary of over $100,000, prorated for the covered period; 4 (2) taxes imposed or withheld under chapters 21 (FICA), 22 (Railroad Retirement Tax), and 24 (payroll taxes) of the Code; (3) compensation of employees whose principal place of residence is outside of the United States; (4) qualified sick and family leave for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act.

Analogy step 1. A 501(c)(3) was in business from . During the 1-year period before the date the loan will be made, the 501(c)(3) employed one hundred (100) individuals, each of whom cost the organization $60,000 per year in total payroll costs (salary, benefits, etc.). The maximum loan amount for this nonprofit is $1,250,000, calculated as follows: The average total monthly payments by the applicant for payroll costs incurred during the 1-year period before the loan date is $500,000 ($60, = $5,000 x 100 employees). $500,000 x 2.5 = $1,250,000.

Analogy 2. Same facts as above, except that the 501(c)(3) employs ninety-five (95) individuals, each of whom cost the organization $60,000 per year in total payroll costs (salary, benefits, etc.), and five officers, each of whom cost the organization $150,000 per year in total, including $130,000 of compensation to each of those five officers. The maximum loan amount for this nonprofit is $1,312,500, calculated as follows: The average total monthly payments by the applicant for payroll costs incurred during the 1-year period before the loan date is $525,000 ($60, = $5,000 x 95 employees = $475,000, plus $120, ($150,000 less the $30,000 of compensation in excess of a $100,000 annual salary) = $10,000 x 5 officers = $50,000). $525,000 x 2.5 = $1,312,500. 5

Permitted Spends regarding Financing Continues

The borrowed funds proceeds might only be studied to possess (1) payroll; (2) workplace classification medical care masters; (3) notice towards mortgage debt; (4) rent; (5) utilities; and you will (6) attract toward most other loans sustained in advance of (collectively, Allowed Uses). The loan is almost certainly not regularly prepay financial attract otherwise to the percentage regarding dominant into the a home loan.

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