Apr 25, 2020

How Nonprofits Can Benefit from and Apply for a PPP Loan

Nonprofits have been hit hard by the coronavirus pandemic. Luckily, nonprofit organizations can apply for a financial lifeline through the Paycheck Protection Program (PPP). PPP loans offer low-interest, potentially forgivable loans to help nonprofits retain staff through the crisis and meet payroll-related expenses. 

How Much Can a Nonprofit Qualify for with a PPP Loan?

The maximum PPP loan amount for all PPP loans is 2.5 times your average monthly payroll costs. This includes items like wages, salaries, retirement benefits, paid time off, and severance pay. For help calculating your nonprofit’s PPP loan, you can use our PPP loan calculator. The maximum allowed amount for a PPP loan is $10 million. 

How Can a Nonprofit Have Their PPP Loan Forgiven?

Funds used for “allowed uses” in the first 8 weeks of the PPP loan, starting at the date you receive funds, are eligible for loan forgiveness. Due to the overwhelming demand for PPP loans, it’s estimated that 70% of the funds will need to be used to cover payroll costs in order for the loan to be forgiven, but nonprofits can also use funds to cover rent, utilities, and mortgage interest payments. Importantly, payments against a mortgage principal are not included. 

Loan forgiveness is not automatic. You will need to apply for forgiveness through your lender, and proper documentation is required to show that you have used the funds for forgivable uses. If you need help tracking expenses and payments, Sunrise offers free accounting software to help you track all your expenses so you can be in compliance with PPP loan forgiveness requirements. 

How Can a PPP Loan Help Nonprofits?

A PPP loan can help nonprofits continue to pay their employees to get through the coronavirus pandemic. With a maximum loan amount, you can use a PPP loan to pay employees for 2.5 months, even if your services and/or fundraising have been interrupted. PPP funds can also help nonprofits cover crucial costs like rent and utilities to help you keep the lights on. 

Where Can a Nonprofit Apply for a PPP Loan?

There are 3 ways a nonprofit can apply for a PPP loan. If your nonprofit banks with an approved PPP lender that is participating in the program, you can apply directly through them. If you don’t, you can apply through fintech lenders or through a lending marketplace

At Lendio, we facilitated $5.8 billion in loans for 70,000+ borrowers in the first round of funding—because we believe that small businesses and nonprofits shouldn’t be locked out of the program just because they don’t happen to bank with a previously-approved SBA lender. 

How a Nonprofit Can Apply for a PPP Loan

For borrowers applying for a PPP loan through Lendio, we’ve created this step-by-step guide to help you ensure your application is complete. 

For nonprofits, an authorized agent will need to complete the application. When you reach the question, “Do you or any other individual own 20% or more of the business?” a nonprofit will naturally answer “no” because that’s not how nonprofits work.  

Once you do, you will be prompted with the question, “Are you an authorized agent for the business?” You need to be an authorized agent to move onto the next step, submit documents, and complete the application. 


While every effort is made to ensure the accuracy of information when a story is published, the coronavirus pandemic and Paycheck Protection Program (PPP) have caused details to change at a rapid pace. Additional guidance from the government may change or clarify certain aspects of the forgiveness process and could result in changes to the information contained in these pages. For the most up-to-date information, please visit the COVID-19 section of our website. For more information, you can call us at (855) 853-6346. Lendio is not responsible for and provides no warranty as to the accuracy of this content. Lendio does not provide legal, accounting or tax advice. The information and services Lendio provides should not be deemed a substitute for the advice of such professionals who can better address your specific concern and situation.

About the author

Mary Kate Miller
Mary Kate Miller
Mary Kate Miller is a writer based in Chicago, IL. She specializes in covering finance (personal and business), investing, and real estate. Her mission in life is to give readers the confidence and the knowledge needed to grow their wealth by making financial topics more accessible. When she's not writing about topics like business loans, you can find her playing armchair financial advisor to the Real Housewives.


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