Faith-based organizations eligible for SBA loans in coronavirus stimulus, officials say

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Faith-based organizations like churches and other houses of worship can be eligible to receive federally-funded, forgivable loans through the coronavirus stimulus package, authorities clarified this week.

And that includes payroll loans that could compensate ministers.

“No otherwise eligible organization will be disqualified from receiving a loan because of the religious nature, religious identity, or religious speech of the organization,” the Small Business Administration (SBA) announced in a statement Monday.

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The move comes as state and local governments around the country have forced businesses deemed nonessential to shut their doors in an effort to try and slow the spread of COVID-19. The virus had killed at least 12,285 people in the United States as of Tuesday evening and infected 386,817.

Churches, especially smaller ones, can rely on weekly contributions from their members -- yet many are barred from holding services during coronavirus-related shutdowns around the country.

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The funds will come through provisions of the federal Coronavirus Aid, Relief and Economic Security Act (CARES Act) that allow the SBA to offer relief directly to small businesses -- particularly the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program.

“The CARES Act explicitly makes nonprofit entities eligible for the PPP program, and it does so without regard to whether nonprofit entities provide secular social services,” the SBA said.

The administration will not enforce some existing regulations that prevent it from funding religious organizations because “those regulations bar the participation of a class of potential recipients based solely on their religious status.”

Restrictions on the funding for faith-based organizations are the same as those placed on other small businesses that qualify for the loans, the SBA said. And the PPP loans are meant to cover employee salaries.

“In particular, loans under the program can be used to pay the salaries of ministers and other staff engaged in the religious mission of institutions,” the SBA said.

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And Treasury Secretary Steven Mnuchin tweeted Tuesday that the Trump administration was already working with Washington lawmakers on a plan to expand funding for the PPP loan program.