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An interim final rule published by the U.S. Small Business Administration (SBA) gives clarity to the question of religious liberty protections for churches and religious nonprofits who choose to take advantage of the Payroll Protection Program (PPP) that begins taking applications today, April 3, 2020.

The interim final rule provided this statement: “All loans . . . will be made consistent with constitutional, statutory, and regulatory protections for religious liberty.”

The rule also restates an existing regulation that “nothing in [SBA nondiscrimination regulations] shall apply to a religious corporation, association, educational institution or society with respect to the membership or the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution or society of its religious activities.”

Many have contacted our office regarding this issue. There has been a general concern that there would be religious liberty implications for churches and ministries by taking PPP monies. As discussed in the CARES Act, this money is to assist small businesses and corporations in distributing funds to employees, allowing businesses to retain employees during this time. The burden on our unemployment system is significant, and this program assists small businesses, including churches and religious nonprofits, in providing for employees during the COVID-19 crisis.

Cedric Richmond (D-LA.), Mike Johnson (R-LA.), James E. Clyburn (D-SC), and Steve Scalise (R-LA) wrote in a separate letter to SBA Administrator Carranza, Treasury Secretary Steven Mnuchin, and Labor Secretary Eugene Scalia that “while the definition of non-profit organization in Section 1102 explicitly applies only to the paycheck protection program under Section 7(a) of the Small Business Act established by that section, we can assure you that Congress did not intend to require non-profits to possess an exemption determination letter to be eligible for assistance through any other section of the CARES Act either.”

The letter also made it clear that “many houses of worship and their congregations would suffer great harm if they are not eligible to receive the assistance Congress intended for them to receive.”

This clarification from the SBA is extremely important for the churches and religious charities who are considering PPP. If you still have questions or would like assistance moving forward with the program, please contact our office by phone at 888-233-6255 or by email at info@ncll.org.