An additional $310 billion in forgivable loans from the Small Business Administration (SBA) Paycheck Protection Program (PPP) will soon be available, but you should move fast if your practice needs financial assistance.
The additional funds are part of a $484 billion COVID-19 relief package federal lawmakers approved Thursday night. The president signed it into law Friday.
The PPP loan provides 2.5 times your practice’s average monthly payroll costs (excluding salaries of $100,000 or more) and is capped $10 million.
SBA had made $350 billion in PPP loans available in late March, but those funds were completely allocated by April 16, SBA said last week. This new round of funding is likely to move just as quickly if not faster.
If you receive a PPP loan, you will owe money if you do not maintain your staffing level and payroll, although reductions that occur beginning Feb. 15 will be disregarded as long as employment and salary levels are restored by June 30. Interest on the part of the loan that is not forgiven is fixed at 1%; the loan will be due in two years and payments are deferred for six months.
Many practices have been struggling financially during the COVID-19 pandemic, as in-person patient visits have decreased and restrictions on non-urgent elective surgeries and procedures have been in place.
During the Texas Medical Association’s COVID-19 telephone town hall meeting Monday evening, 24% of Texas physicians said they have lost three-quarters to all of their practice’s revenue since the start of the pandemic. Another 36% have lost between half and three-quarters of their revenue.
To help you make informed decisions for your practice during the pandemic, TMA has published a Practice Viability Toolkit that provides the most up-to-date information and resources.
The toolkit includes a section on cash flow, including SBA loan assistance, lines of credit, payment deferrals, loan refinancing, and loans from private banks.
You can find the toolkit and other tools, resources, and information on the practice viability section of the TMA COVID-19 Resource Center.