For those who have asked about Steering Committee authority to approve loans, here is the Article from the Inter-Group Association of Alcoholics Anonymous of New York Bylaws
ARTICLE XI: Incurrence of Debt
No debt or continuing obligation shall be incurred without the consent of a two-thirds vote of the Steering Committee. No funds of the Association shall be expended or appropriated for any non-budgeted purpose without the consent of the Steering Committee, or unless directed by two-thirds of a quorum of the Delegates.
Three possible decision for delegates to choose from: does New York Intergroup:
Pay back the loan asap.
Keep the loan and pay it back over time with interest.
Apply for the loan to be forgiven.
Below, please find information about the loan that people have asked about.
On April 28th, 2020, the Steering Committee discussed whether to apply for the PPP loan, debated taking money from non-AA organization, and decided to apply and take the money given the financial uncertainty faced at the outset of the pandemic.
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on payroll. First Draw PPP Loans can be used to help fund payroll costs, including benefits, and may also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.
PPP loans have an interest rate of 1%.
Loans issued prior to June 5, 2020 have a maturity of two years. Loans issued after June 5, 2020 have a maturity of five years.
Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower’s loan forgiveness amount to the lender.
If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (either 8 weeks or 24 weeks).
No collateral or personal guarantees are required.
Neither the government nor lenders will charge small businesses any fees.
First Draw PPP Loan forgiveness terms:
First Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:
Employee and compensation levels are maintained
The loan proceeds are spent on payroll costs and other eligible expenses; and
At least 60 percent of the proceeds are spent on payroll costs
How and when to apply for loan forgiveness: A borrower can apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been used.
Borrowers can apply for forgiveness any time up to the maturity date of the loan.
If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender.
NYIG loan specifics:
Amount: $51,182; Covered period 6/25/2020 to 5/1/2021.
NYIG has met the forgiveness requirements because we covered rent and payroll in the amounts necessary to qualify.
NYIG has met its payroll every month since March 2020 and there has been no instance where payroll was in question (prudent reserve still exists). NYIG did not use any of the PPP. The full amount was set aside and has not been touched, similar to the EIDL loan.
This year’s budget was in turmoil due to pandemic’s effect on costs (Zoom) and revenues (donations).
Our salaried staff has been reduced, outside contractors have increased dramatically, but revenue/incoming funds have covered it all. The staff reduction was not due to reduced incoming funds.
Prudent Reserve Target:
The prudent reserve of liquid funds is a target that NYIG hopes to have on hand that would cover a year’s worth of expenses. The prudent reserve is not a separate set of funds that we can use or not use at our discretion. It is a target amount of funds that we would like to have in our accounts.
Expenses are averaging about $60,000 per month (looking at the last three months of 2020). These expenses will drop by about $20,000 once the Zoom account ends.
Donations for the last three months of 2020 have averaged about $90,000 per month. With the dissolution of the Zoom account, we expect donations to taper off after February.
Our net income is averaging $30,000 a month for the last quarter of 2020. This positive net income stream adds to our prudent reserve.
Available funds (less the PPP) were about $300,000 at year end, giving us about 5 months of prudent reserve. So, we are regularly spending out of our target prudent reserve of 12 months.
The budget for the first half of 2021 has donations averaging about $75,000 in the first quarter and $60,000 in the second quarter. Expenses are budgeted at about $65,000 per month for the first quarter and $60,000 for the second quarter. Zoom costs should drop from $20,000 to about $12,000 in April, but this is still uncertain.