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The Paycheck Protection Program – What Do Churches Need to Know?

Is the government really giving free grants to churches?

The Paycheck Protection Program, or Payroll Protection Loans have been a hot topic of conversation over the last couple weeks. If you’re not familiar, they’re a part of the CARES Stimulus Act. In short, they are loans provided as assistance (and incentive) for small businesses, non profits, and churches to keep their employees on the payroll. If you meet certain criteria, these loans may be forgiven.

But, if you, like most of us, don’t spend a great deal of time exploring the benefits, limitations, and requirements of these types of programs, you might feel a little lost and a lot overwhelmed. To get some clarification, we talked with Josh Rice of Ministry Renewal, an organization offering direct support to churches as they navigate this program. We asked Josh six questions to help all of us better understand the Paycheck Protection Program and understand if it is the right choice for each of our individual churches.

1. What are Payroll Protection Loans?

The Payroll Protection Program is a part of the CARES Stimulus Act that congress passed in response to the pandemic. It allows a small business, nonprofit, or church with less than 500 employees to apply for a loan that can be used for 8 weeks of payroll, utilities, and rent expenses. At the end of the 8-week period, if in fact the loan is used according to the rules, it is converted to a grant and forgiven. If not, the loan must be paid back within 10 years, but the interest rates are extremely favorable and there are no loan fees.

$350 billion was initially appropriated for this program, and congress is presently debating an additional $250 billion with the expectation that the first round of funds will run out as early as this Friday.

2. What does a church need to do to take advantage of them?

These loans are distributed through retail banks, so the first step is to find out if your bank services SBA (Small Business Administration) loans. If not, there are some banks that are taking applications from those who are not pre-existing clients. The SBA/PPP application is only two pages, but banks are asking for more documentation to prove your numbers, presumably because these will be required in the later stages of this program. What is remarkable is that the application process is largely on the “honor system.” Banks are not spending energy to verify that your application is accurate. In my opinion, this is having a lulling effect as churches assume that the remaining two steps of the process – compliance documentation and grant conversion – will be just as easy.

3. What does a church need to be aware of?

First, the loan amount is based on your average monthly payroll from April 2019 – March 2020 X 2.5. Second, we know virtually nothing about how compliance and grant conversion will be governed, verified, and enforced. The Fed has not issued guidance to the banks about these components yet. I am increasingly concerned about the predominant narrative out there among pastors that “this will be easy.” That remains to be seen.

4. Should every church apply for these loans?

Not every church is experiencing a drop in income right now. In fact, those who have made use of tools and strategies like SecureGive offers are often holding steady. Do we really believe that if a church can pay its bills perfectly on its own, the government is going to just pad the church’s savings account? That is not in keeping with the spirit nor goals of this program. I think it’s more likely that you are going to have to prove the need, to supply documentation of your income. The math on this may get complicated. Documenting compliance could be arduous.

5. What’s the catch (if any)?

The predominant narrative that has swept through the church world essentially says this (even my church’s auditor issued us this guidance, which I continue to debate): Open a separate checking account and have the PPL funds disbursed electronically to the new account. Use that account to cover payroll and all other expenses that are convertible for an 8-week period. Retain your staff. After 8 weeks if you spend 100% of the money from the checking account on the right things, you don’t owe a dime back.
But, we are coaching churches to assume this will be a loan unless you meet the specific criteria connected to the stated purpose of the bill: (1) retain staff that you otherwise would have to lay off or (2) rehire staff that you have recently furloughed or laid off. That’s what the bill clearly says. Many churches are convinced that they can play a “shell game” with the funds, using them to pay existing staff and doing whatever they want with their regular income. That, more than likely, will not be the case.

6. Lastly, what is Ministry Renewal specifically offering churches?

We realized the day the bill passed that churches would need help to successfully apply and set themselves up to be eligible for grant conversion. We help churches to submit the initial application, then provide coaching and supervision for ongoing compliance and the ultimate grant conversion application. You can call us at 404-665-7007, email, or visit


As you’ve likely gathered from Josh’s insight, there are still several unknowns with this program. Will your church meet the criteria to avoid having to repay these loans? If you do meet the criteria, what will you have to show to prove it? Will it really be as easy as it seems up front?

This could be a great program for your church, or it could result in your church taking on unnecessary debt. Bottom line, if your church isn’t equipped to fully understand and make this decision, connect with someone who can help. To get you started, you can find more information directly from the team at Ministry Renewal here. And even then, you don’t have to go about it alone. Work with an organization like Ministry Renewal who understand both the unique circumstances of this program and the unique needs of a local church.

Our special thanks to Josh Rice for sharing his insight in this article. Josh serves as an Executive Consultant with Ministry Renewal to work with churches on generosity initiatives, capital campaigns, and debt reduction strategies. To learn more about Ministry Renewal and how they can help your church, visit


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