A key part of the federal government’s response to the COVID-19 pandemic is financial support for small businesses, including not-for-profit organizations, across the country. Starting April 3, small businesses will be able to apply for and receive Paycheck Protection Program funds, which come in the form of loans that can be fully forgivable if the borrowing organization maintains/restores its payroll.

Loan forgiveness will be provided for "the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities," according to guidance issued March 1 by the Treasury department. Not-for-profit organizations can be eligible for these loans if they are registered as a 501(c)(3) organization and have 500 or fewer employees.

LeadingAge published an article discussing the program in greater detail, including new guidance from the U.S. Department of Treasury. In this article, we emphasize the potential support the Paycheck Protection Program could provide adult day services providers and other aging services organizations.

SBA Paycheck Protection Program Could Help Sustain Adult Day

While aging services organizations of all types stand to benefit from these dollars, adult day services providers may find this opportunity to be particularly helpful. Adult day services providers in several states have been required to close to stop the spread of COVID-19 and/or have done so on a voluntary basis. For those that remain open, attendance is frequently down significantly now compared to the months preceding the pandemic.

As a result, many adult day services providers have lost all or most of their revenue. The Paycheck Protection Program may help such providers get through the pandemic.

Some states are providing adult day services and other provider types with retainer payments during the pandemic, including through the 1915(c) Appendix K (Emergency Response) process. Most states have not done this yet, however, and even in those that do the funds these payments provide may not be enough for adult day services organizations to make ends meet.

Aging Services Across the Continuum May Also Benefit

The Paycheck Protection Program is open to smaller not-for-profit organizations and other small entities, provided they meet the program criteria. Because of this, aging services providers of all types may be eligible to participate.

So long as a not-for-profit organization is registered as a 501(c)(3) organization and has 500 or fewer employees, they may be able to receive Paycheck Protection Program funds. Most other types of not-for-profit organizations (e.g., 501(c)(4), 501(c)(6)) are not eligible for this program. Because the loans are forgivable for most payroll costs, nursing homes, hospices, PACE organizations, life plan communities and in-home services (e.g., home health) providers may be able to use these funds to help cover staffing costs.

LeadingAge encourages members to review the information available on the Paycheck Protection Program and consult with their banks before pursuing next steps. We will continue to share updates on our COVID-19 web page, www.leadingage/covid19. Members may also submit questions to covid@leadingage.org.