The CARES Act: Economic Injury Disaster Loan (EIDL) Program vs. Paycheck Protection Program (P3)

On Friday, March 27, the President signed and enacted into law the Federal stimulus bill in response to the COVID-19 virus, known as the CARES Act. Many key provisions in the Act benefit small businesses and nonprofit agencies, including the small business loan programs administered through the U.S. Small Business Administration (SBA), like the Economic Injury Disaster Loan (EIDL) Program, and those directly administered through the CARES Act. known as the Paycheck Protection Program (P3). We created a comparison of these programs.

Continue to comparison of programs:

BLUE & CO.

Offer: Blue & Co. SBA Emergency Injury Disaster Loan application assistance

All 501c entities are eligible to apply for a COVID-19 EIDL loan.  This includes sorority or fraternity organizations, house corporations and other similar nonprofit organizations. The loan provides working capital of up to $2 million to small businesses and can be used for payroll, accounts payable, debt payments and other bills that could have been paid had the disaster not occurred.

Blue & Co. can complete the application process with the SBA for organizations interested for a fee not to exceed $1,750.  Completing the application does not guarantee approval or fund payout.  Formal approval of loan requests will come directly from the SBA. 

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The information requested in the attached form must be completed in its entirety and the form emailed to anovotney@blueandco.com

Housing Discussion

April 2, 2020—Q&A about the impact of COVID-19 on fraternal housing with Jack Dawson of College Fresh; Allan Lutes of Alpha Management; Woody Ratterman of CSL Management; Heith Sheeley of Greek House Chefs; Clay Wardlaw of Safety Plus LLC; and Judson Horras, NIC President and CEO

Key Points:

  • Budget for additional operations funds for cleaning and related services.
  • Consider health screenings for employees and staffing needs. How can you help team members avoid getting sick?

Resources discussed:

State of Athletics in the Face of Coronavirus

The LEAD1 Association, which represents the athletics directors of the 130-member schools of the Football Bowl Subdivision, and Teamworks, the leading athlete engagement platform for collegiate and professional organizations, surveyed more than 100 FBS athletics directors on their concerns, plans and goals in light of the current pandemic.

While this situation continues to evolve and new variables are introduced every day, ADs are faced with decisions that must be made now, based on the information that they have available. The “State of Athletics in the Face of Coronavirus” report reveals how they are approaching this unprecedented time and attempting to best serve their student-athletes and institutions.

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Fundraising Discussion

April 2, 2020—Q&A about the impact of COVID-19 on fundraising with Patrick Alderdice, Pennington & Co.; Ryan King, associate executive director at Delta Upsilon Educational Foundation; Jen Polley Webb, executive director at Alpha Delta Pi Foundation; Allison Rickels, executive director & CEO at Farmhouse Foundation; and Judson Horras, NIC President and CEO

Key Points:

  • Keep fundraising despite the temptation to stop. Focus on stewardship.
  • Use this time to invest in connecting with your alumni and recruiting volunteers.

Enrollment/Admissions Forecasts Discussion

April 1, 2020—Q&A about the impact of COVID-19 on enrollment and admissions with Trent Gilbert, vice president of Enrollment Management at Birmingham Southern College; Chuck May, executive director, Student Recruitment and Admissions at the University of Missouri; Dusty Newton, director of Undergraduate Recruitment & Admissions at the University of Nebraska, Kearney; Dawn Watkins Wiese, Ph.D, partner with Plaid; and Judson Horras, NIC President and CEO

Key Points:

  • May 1 national deadline will provide best data. (Some campuses may delay deadline.)
  • Decline in returning students is likely, just not sure how steep.
  • Decline in new students very unsure still.
  • Parents have the biggest influence in enrollment.

The significance of Brotherhood during a pandemic

After Ryan Temby’s wife was in contact with a co-worker who was confirmed to have the COVID-19 coronavirus, the Temby family immediately went into quarantine. She showed very mild symptoms, similar to the symptoms of seasonal allergies, but did not experience any serious concerns. The family kept some distance within the house to try and avoid spreading the illness. Ryan and his two young adult children were doing fine.

About four days later, however, Temby started to have symptoms – and then rapidly declined.

“I am not the person I was before the virus,” he said.

Virus symptoms

It started as an achy, sore throat with an infrequent cough, every 30 to 60 minutes, Temby said. On Day 5, however, he started to feel very poor.

He called his normal doctor, who told him not to come in for treatment, saying he should remain in quarantine. It’s better to just assume you have the virus and quarantine for at least 14 days, the doctor told him. Temby was not officially tested for COVID-19 since he is not considered a high-risk patient.

Temby said he got rapidly and progressively worse.

“It’s a weird virus. For the first few days, you feel fine, like nothing is wrong. But, suddenly, you feel awful when the fever sets in,” he said. “At first it felt like I had a cat sitting on my chest – I couldn’t breathe. That feeling quickly got worse. For a few days I felt like I had a Bernese mountain dog sitting on my chest.”

Temby said acetaminophen helped when the fever was at its height. He had a bad sore throat and was very lethargic. He cycled through the fever and breathing issues for about six days.

He was able to get supplementary medical care and advice through his Sigma Chi network. Two doctor brothers were personally checking in on Temby and answering questions.

“They have been incredible,” he said of his brothers.

Family

On about the seventh day after Temby’s worst symptoms manifested, he woke up feeling somewhat better after a long night. That was just under a week ago, and “I’m feeling better and better every day” since, he said.

Ryan’s son, unfortunately, has been sick, following the same illness cycle as his father but a few days behind. Temby said his son is doing OK and he expects major improvement any day now. Temby’s daughter has been fine, not at all sick, and has been helping to take care of the rest of the family. His wife also remains well.

“We’ve always been a very close family,” he said. “Fortunately being in quarantine hasn’t been an issue. For example, we are playing video games from different rooms of the house. Despite everything, it’s been nice to spend time with them.”

Brotherhood

Temby says he felt it was important to share his story with his Sigma Chi brothers and the interfraternal community. He serves the fraternity internationally as grand treasurer so his leadership role allows him to connect with many people.

“I want to get out there to the guys how dangerous and serious this is,” he said. “I hope the messages that I put out made them take precautions and make smart choices, to realize how serious this pandemic is.”

He has been posting about his experience in a closed social media group for brothers.

“The response has been unbelievable. People are calling, texting, sending flowers,” he said.

Temby says he got the best advice on dealing with the illness via social media from a brother he’s never met. The brother sent him a podcast from a doctor in Hong Kong who had been treating patients for months that he found helpful.

The two Sigma Chi doctors have been amazing friends and advisors, he said. They call and check in every day. Both offered to come to his house, and one of them actually did personally check in on Temby – wearing full protective gear and staying appropriately distanced.

“The brothers coming out to help have been incredible,” he said.

This week he is planning to emerge from quarantine and slowly resume working remotely, both for the NIC and for Sigma Chi.

“I’m ready to hear how the rest of the brothers are doing and how the fraternity world is doing,” he said.

NIC Vice President of Campus Operations Ryan Temby and his family have been suffering a respiratory illness while quarantined at home in the Columbus, Ohio, area in recent weeks. We wanted to provide this real life perspective and share how his Sigma Chi brotherhood helped Ryan as he battled this virus.

McKinsey & Company COVID-19 Briefing Materials

This document is meant to help senior leaders understand the COVID-19 situation and how it may unfold, and take steps to protect their employees, customers, supply chains and financial results.

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SBA Economic Injury Disaster Loans & Loan Advance Program

As a follow up to our guidance on the CARES Act, we want to make you aware of the Small Business Administration’s (SBA) Economic Injury Disaster Loans & Loan Advance Program (EIDL).

All 501c entities are eligible to apply for a COVID-19 EIDL loan…this includes sorority or fraternity organizations, house corporations and other similar nonprofit organizations. The loan provides working capital up to $2 million to small businesses and can be used for payroll, accounts payable, debt payments and other bills that could have been paid had the disaster not occurred.

Click here to read more information directly from the SBA on the COVID-19 EIDL program. On that page you will also see the application link. One of the highlights of the EIDL program is a Loan Advance of up to $10,000. This loan advance, in some places referred to as an “emergency grant,” does not have to be repaid even if the applicant is denied the loan. Note, only applicants that fully complete and submit an entire loan application will receive this advance. The applicant will be required to demonstrate certain qualifications, for example: ability to repay, credit history, substantial economic injury as a result of the disaster, etc.

How is this different than PPP?

The EIDL program varies from the CARES Act Paycheck Protection Program (PPP) in a few important ways. (sample PPP application form)

  1. CARES PPP only applies to 501c3 organizations, whereas all 501c nonprofit organizations are eligible for EIDL.
  2. Although EIDL can provide an advance of up to $10,000, the applicant is still seeking to take out a loan that must be repaid. Under current law, there is no forgiveness beyond the $10,000, and an applicant must certify, among other things, that it can repay the loan.

 One important word of caution: If your organization is exploring both the PPP and the COVID-19 EIDL loan program, please understand that participation in one may affect the participation in the other. You should consult with your financial/tax professionals in completing these applications.

Finally, we expect that the demand for EIDL loans will be far greater than the current supply. Therefore, it is important that you submit your entity’s EIDL application as soon as you can do so thoroughly.

Here you will find a detailed FAQ on this program, including details on how to apply, from Arnold & Porter. Please note, Arnold & Porter has an engagement with both the National Panhellenic Conference and the North American Interfraternity Conference. They provide legal and public policy guidance to these two organizations, they cannot provide legal guidance to individual sorority and fraternity organizations. We recommend that you engage with your own organization’s legal counsel or financial/tax professionals to assist you in making decisions about how to move forward.

Please contact Clark Brown with questions.