Since December 2020, Congress has passed two massive pandemic relief bills that, combined, totaled roughly $3 trillion, including numerous funding opportunities for which your chorus may be eligible.
Note: This blog is only relevant for organizations based in the U.S.
Last Updated: March 19, 2021 @ 4:30 PM Eastern Time. Search this page for the word "UPDATE" to see what's new.
UPDATE: If you're reading this prior to April 1, 2021, there is urgent and timely information you need to know:
If you have questions, please share them in the comments below. As the government provides more specific guidance on each of the below programs, we’ll update this blog and respond to your comments to make sure you have the most accurate information available.
In the meantime, below is a list of the funding opportunities and what you need to know now.
The Paycheck Protection Program (PPP) was first created as part of the CARES Act in April 2020 to help small and mid-sized organizations maintain payroll in the midst of pandemic chaos and lockdowns. Loans made under this program can be partially or fully forgiven, which is why I refer to it as a grant program. The new bills added over $280 billion to the program, and — drumroll, please! — allow many folks who’ve already received a loan to apply for a second one. Loan terms (interest rate, term length, etc.) are largely identical to first draw loans. Check out our April 2020 blog for more info.
Note: The April blog has not been updated to reflect changes enacted in June 2020 when Congress passed the PPP Flexibility Act. That law gave recipients 24 weeks (originally 8 weeks) to accrue covered expenses for which they could receive forgiveness. That bill also required 60% (originally 75%) or more of the loan to be used for payroll costs, otherwise it would impact the amount for which you could be forgiven. Those numbers (24 weeks and 60%) still apply, including for second-draw loans.
Who can apply for a second draw PPP loan?
You’re eligible to apply if you meet the following criteria:
If we’re eligible, is there any reason not to apply for a second PPP loan?
UPDATE: Prior to mid-March 2021, you were barred from applying for both a PPP loan and an SOS grant. That restriction was eliminated as part of the March 2021 relief bill, but any new PPP loans you receive (after December 27, 2020) will be deducted from your SOS grant amount. In other words, you can't get the full value of both grants. But since SOS grant applications still aren't open, it's safe to apply for a PPP loan right away, especially if you need immediate cash or aren't sure whether you'll qualify for an SOS grant.
How do we apply for a second draw PPP loan?
You should be able to apply through the same bank where you received your first draw loan. If you do, and if you use the same payroll reference period for calculating the loan amount that you did the first time around, the bank may be able to reuse your supporting documentation already on file, making the application process even easier.
What if we want to use a different bank?
That’s fine too, but there may be additional paperwork involved since the new institution won’t already have your supporting documents on file.
Also, if you’re looking to apply through a different bank but don’t know where to go, check out Cross River Bank. We (Chorus Connection) had an excellent experience working with them back in April 2020 and you don’t need to be an existing customer to apply through them.
What documentation do we need to prove our revenue dropped 25%? And when do we submit that information?
According to the SBA’s second draw IFR (page 16), documentation for this eligibility requirement "may include relevant tax forms ... or, if relevant tax forms are not available, quarterly financial statements or bank statements."
If you’re applying for a second draw loan of more than $150,000, you’ll need to supply the above documentation during your initial application. If you’re applying for $150,000 or less, you can choose to delay submission of the above documentation until you’re ready to apply for loan forgiveness.
Has anything changed for calculating second draw loan amounts?
Yes! The new bill allows you to include group life, disability, vision, and dental insurance when calculating payroll costs. This expansion may allow you to apply for a slightly larger loan this time around. Note: This expanded definition also applies when calculating forgiveness amounts for both first and second draw loans.
Any changes regarding forgiveness for first or second draw loans?
Yes! Lots of good news here:
What if we never got a PPP loan?
$35 billion in the new bill is earmarked for first-time PPP loans. Provided your organization qualifies, it’s not too late! Check your bank’s website for information right away. And if you have trouble applying through them, check out Cross River Bank.
Is it possible the new PPP funding will run out?
Yes, that is absolutely possible, and actually happened with the first round of PPP funding in April before the program received additional funds later in 2020. That said, at least $25 billion in the new bill must be given to organizations that either: 1) have 10 or fewer employees, or 2) are in low- or moderate-income neighborhoods and are seeking up to $250,000. In short, there are protections for smaller organizations, but the best way to ensure funding for your organization, regardless of whether you qualify for the above earmark, is to apply ASAP. Update: The new round of PPP funding is only available through March 31, 2021, so that's more likely to be the limiting factor.
The December 2020 stimulus bill included a section titled Grants For Shuttered Venue Operators (SVO), also known as the Save Our Stages (SOS) Act. This section provides $15 billion in funding for various types of cultural institutions that have been devastated by the pandemic, including "live performing arts organization operators."
UPDATE: Although the program isn't open yet, the SBA has issued guidance on the SVO/SOS program that includes good news for choruses of all types, including those with all volunteer singers. See below for more information.
Who can apply for an SOS grant?
According to the bill, you're eligible for an SOS grant if:
Our chorus is made up of volunteer singers. According to the requirements above, performers must be "paid fairly and do not play for free/tips except for fundraisers or similar charitable events." Does this mean we're ineligible?
UPDATE: Good news! You're (probably) still eligible! The SBA's latest FAQs page includes the following question: "Would nonprofit organizations that host performances which include volunteer choruses and/or student performers be able to meet this requirement?" The answer: "Yes. Provided the events ... are produced and managed primarily by paid employees, the use of volunteers in the production casts would not disqualify it." You'll have to determine for yourself exactly how this applies to your organization.
How much money are we eligible to receive?
You’re eligible to receive up to 45% of your gross earned revenue in 2019. If any money remains in the program’s budget on April 1, 2021, the SBA can issue second grants to organizations that lost 70% or more of their revenue in the most recent quarter compared to the same quarter in 2019. These “supplemental” grants can be up to 50% of the initial grant.
Membership dues from a singer can be included in earned revenue based on the estimated value of the goods and services provided to that singer. Any portion of membership dues beyond that value should be treated as a contribution and considered unearned revenue.
How do we apply?
The program hasn't launched yet. Check out the SBA's FAQs (see the heading "Application") for steps you can take right away to prepare for when applications go live.
When can we apply?
The SBA has not yet announced the launch of this program, so stay tuned for further guidance. However, be aware that this program will launch in three stages, with prioritization based on the impact of the pandemic on revenue:
Are there restrictions on how we can spend the money?
SOS grants can cover expenses from March 2020-December 2021 ("supplemental" grants can cover expenses through June 2022). Funds can be used for the following categories of expenses (for long-term obligations, like mortgages, debts, and rental leases, those obligations must have been in place prior to February 15, 2020):
Are there any protections for small organizations?
As with PPP loans, the SOS program has earmarked a portion of the program for smaller organizations. At least $2 billion is set aside for organizations with up to 50 full-time equivalent employees. However, this earmark will be released after 60 days, so apply ASAP to maximize your odds of getting SOS funding.
UPDATE: The SBA is no longer accepting applications for this program.
In the December 2020 relief bill, Congress decided to expand the Emergency EIDL Grant program to funnel extra funding to hard-hit organizations in low-income communities. The bill authorized an additional $20 billion for these grants, called Targeted EIDL Advances. Have additional questions not answered below? Check out the SBA's FAQs here.
Who qualifies for a Targeted EIDL Advance?
To qualify for one of these grants, you must:
How do we apply for a Targeted EIDL Advance?
You don't need to do anything to apply. Only organizations who have already applied for Emergency Grants in the spring are eligible, so the SBA already has info on file for all potentially eligible organizations. They'll reach out to you with next steps if you meet the basic requirements.
What if we already received an Emergency Grant?
If you’ve already received an Emergency Grant, you’re eligible to receive an additional $10,000 minus the value of your Emergency Grant.
How will applications be prioritized?
The new bill states that priority will be given to applicants who already received an Emergency Grant and are looking to “top up” their initial grant. However, it’s unclear what this will mean in practice. Stay tuned for further guidance from the SBA.
A much more limited version of the ERTC was first introduced by the CARES Act back in April 2020 as a way to support organizations who kept employees on payroll during the pandemic. The tax credit was then expanded by both the December 2020 and March 2021 relief bills.
What's the eligibility criteria for the tax credit?
You're eligible for each quarter in 2021 during which you meet at least one of the following criteria:
How is the tax credit calculated?
For each eligible quarter, calculate the wages for each employee, with a cap of $10,000 per employee. Add that all up and multiply by 70%. In other words, you're eligible for up to $7,000 per employee per eligible quarter.
How do I claim the tax credit?
If you use a payroll provider, talk to them about how to take advantage of the credit.
If you process your own payroll, it's a bit complicated, but the IRS has provided an FAQ to help you navigate your options.
Regardless of which of the above scenarios applies to you, the credit you receive each quarter will be applied to federal employment taxes, and may actually be significantly more than the federal employment taxes you normally pay each quarter. As such, you might not realize the full benefit of the credit you've accrued in a given quarter until well after the quarter ends. If you don't want to wait and would prefer to get the full value of the credit right away, you can fill out Form 7200 to get an advance payment from the IRS.
Any restrictions I should know about?
Thanks to expansions of the ERTC in December 2020, you can now both apply for a PPP loan and also take advantage of the ERTC (that wasn't true in the original CARES Act). However, you can't use the same wages to qualify for both the ERTC and PPP loan forgiveness. Say you have an employee whose wages totaled $15,000 in Q1 2021, you qualified for the ERTC that quarter, and you also received a PPP second draw loan in February 2021. You can apply $10,000 of the employee's Q1 wages to the ERTC and the remaining $5,000 to PPP loan forgiveness. Alternatively, you could elect to apply a smaller amount to the ERTC and the remainder to PPP loan forgiveness if you've determined that will have a more desirable financial outcome. Make sure you run the numbers before you claim the credit or apply for a PPP loan to ensure you're able to maximize both of these benefits without inadvertently shooting yourself in the foot.
Also, you can claim the credit retroactively for all wages already paid in the current quarter, however, you cannot claim the credit retroactive for past quarters. So, if you're reading this in March 2021, make sure you prepare ASAP to take advantage of the Q1 credit if you qualify.
Note: One reader just shared with me that you might actually be able to apply retroactively for past quarters going back to Q2 2020. I haven't verified this independently yet, but worth investigating. Be aware that the tax credit had different rules and was less generous in 2020, but could still amount to thousands in additional funding for your organization.
That’s all I’ve got for now. Hope you’re able to take advantage of at least one of these programs. Good luck! Post any questions in the comments below. And bookmark this page to check for updates in the coming weeks.
Disclaimer: The details and advice above are based on information from the SBA and Department of the Treasury websites, news sources, and personally reading the text of the various bills. I’m not a lawyer or policy expert, so it’s definitely possible I’ve gotten some things wrong. Please comment below if anything is incorrect or confusing. I’ll keep this post updated with the most current information I have.