SBA Rules Open the Door for Faith Based Organizations to Access Forgivable Loans Provided Through the Paycheck Protection Program

With the release of an additional interim rule, the SBA cleared the way for all faith based organizations to participate in the Paycheck Protection Program. These guidelines will allow churches, synagogues, and other religious organizations that may have previously been unable to participate in the PPP to have access to the program. These forgivable loans are available to assist small businesses, nonprofits, and religious organizations in keeping their employees on staff and paid during the COVID 19 outbreak.

The rule “exempts otherwise qualified faith-based organizations from the SBA’s affiliation rules, including those set forth in 13 CFR part 121, where the application of the affiliation rules would substantially burden those organizations’ religious exercise. This exemption is required, or at a minimum authorized, by the Religious Freedom Restoration Act (RFRA) (P.L. 103-141), which provides that the “[g]overnment shall not substantially burden a person’s exercise of religion” unless the government can “demonstrate[] that application of the burden” to the person is both “in furtherance of a compelling governmental interest” and “the least restrictive means of furthering that compelling governmental interest.” “

In a press release SBA Administrator Jovita Carranza said “faith-based organizations have always provided critical social services for people in need, and SBA will make clear that these organizations may access this emergency capital.”

HCP has more information on the Paycheck Protection Program and the associated rules, FAQ’s, and application posted on our blog.