Alert

Large not-for-profit organizations with multiple locations may now be able to receive Paycheck Protection Program (PPP) loans under the American Rescue Plan Act, which was signed into law on March 11, 2021.

Additional PPP Funding and Expanded Eligibility

The new law adds $7.25 billion to PPP funding and expands PPP eligibility to not-for-profit organizations exempt under Section 501(c)(3) that have multiple locations and more than 500 employees, as long as no more than 500 employees work at any one location. Under the previous guidelines, not-for-profit organizations with more than 500 employees weren’t eligible to apply for a PPP loan.

Section 501(c)(19) organizations remain eligible for a PPP loan if they have no more than 500 employees, and Section 501(c)(6) organizations remain eligible if they have no more than 300 employees per location.

Section 501(c)(12) cooperatives remain eligible, too, but the size eligibility requirements have changed. Previously, the cooperatives were eligible if they had no more than 500 employees; now, they’re eligible if they have no more than 300 employees per location.

Eligibility for Other Not-for-Profits

Under the American Rescue Plan Act, all other exempt organizations, except for Section 501(c)(4) organizations, are now eligible for PPP loans if they have 300 or fewer employees per location. In addition, these not-for-profits face restrictions on lobbying activities and are only eligible for PPP loans if:

• They don’t receive more than 15% of receipts from lobbying activities.
• Their lobbying activities don’t make up more than 15% of total activities.
• Their lobbying expenses didn’t exceed $1 million for the most recent tax year that ended before February 15, 2020.

Section 501(c)(6) organizations also face the same lobbying restrictions.

There are some exceptions to this new provision. Certain types of exempt organizations, like private clubs that limit the number of members for reasons other than capacity, aren’t eligible for PPP loans.

Performing Arts and Museums

The new law allows performing arts not-for-profits and museums to apply for funds under both the PPP and Shuttered Venue Operators Grant (SVOG) program.

However, if a PPP application is approved for SVOG funding before a loan number is issued for the PPP loan, the applicant isn’t eligible for a PPP loan. SVOG provides more than $16 billion in grants to the venue operators impacted by the COVID-19 pandemic.

PPP Loan Application Deadline

The deadline to apply for a PPP loan is March 31, 2021.

On March 16, 2021, the House of Representatives almost unanimously passed the PPP Extension Act of 2021, which would extend the PPP filing deadline to May 31, 2021. The bill is headed to the Senate for consideration.

We’re Here to Help

To learn more about PPP loan availability and the application process, please contact your Moss Adams professional.