COVID-19 Update #4 from IPS
Dear friends and colleagues,
It’s the end of another week. Doesn’t it feel like February was a full year ago? Or a different lifetime?
I’ve received some encouraging feedback on these newsletters, and I’ll do my best to bring you important news and updates as they come out. Once again, please feel free to forward this email to anyone else you think may benefit.
The Importance of Staying Connected
Back in the old days (three weeks ago?), I used to see my wonderful co-workers, friends, and family in person. Now we enjoy virtual meetings and even “Zoom happy hours”, which have proven surprisingly fun.
If you’re interested in setting up your own Zoom meetings, here are some instructions. Zoom has done away with the 45-minute time limit on the free version, but it works just as well using Skype or Google Hangouts or any other video conferencing program. In the days of ‘shelter-in-place’, this technology isn’t just for business meetings anymore.
And it looks like it’s not just us modern 2020 folks getting on the Zoom meetings…
In all seriousness, it is so important to stay connected to friends and family during this time. Check in with people. I’ve been able to connect with friends I wouldn’t have normally, and it’s been a real blessing.
The SBA Stumbles
According to Reuters, the SBA “issued $28 billion in loans last year, and will have to process more than 10 times that amount in just three months with limited staff.” There is just no way that this will go smoothly.
So I wasn’t surprised at all that no one I’m aware of has received their EIDL grant yet (the up to $10k one), despite having passed the three-day period in which the grant was required to be delivered by the law. I’m following this closely, but my guess is that the SBA has directed their energy most recently towards the roll-out of the PPP program, which leads me to…
The PPP is Live…Mostly!
According to the Treasury guidelines issued a few days ago, April 3rd (today) was supposed to be the first day that applications were being accepted for the Paycheck Protection Act. Just last night, the SBA issued its guidance to banks.
Unsurprisingly, then, most of the banks haven’t set up their own loan processing system and guidelines. BofA has theirs up, but I haven’t seen any others yet. Here’s a helpful list of the banks and the links to their PPP applications. As I’ve mentioned before, if you have an account with one of these banks, that would be a good place to start. That said, I’ve been getting reports that small banks have been far more responsive than the big banks.
Hopefully, the banks will get their acts together and be able to deliver this much-needed assistance quickly and judiciously. It looks like some are requiring that applicants have accounts or even credit cards. Just a few hours ago, Marco Rubio took to Twitter to ask the banks administering these loans to “don’t be a bunch of jerks.” Let’s hope they listen!
But is now the right time to apply?
I’ve been hearing mixed messages on the right time to apply to the PPP. As always, it’s a good idea to check with your banker or CPA. But here’s what I do know.
The period which will determine your eligibility for loan forgiveness is the eight weeks following the “date of the loan” (i.e. the date the check is sent out). Here’s the text from the SBA guidelines:
“The actual amount of loan forgiveness will depend, in part, on the total amount of payroll costs, payments of interest on mortgage obligations incurred before February 15, 2020, rent payments on leases dated before February 15, 2020, and utility payments under service agreements dated before February 15, 2020, over the eight-week period following the date of the loan.“
This means most dentists are now faced with a choice:
- Apply for the PPP now, bring your staff back when you’re ready to re-open, and risk not receiving the 100% forgiveness.
- Wait to apply for the PPP, time the date of the loan to correspond with your re-opening, aim to receive 100% loan forgiveness, and risk losing out on the first-come, first-served available funds.
You could also get your team back on payroll immediately, even if you’re not able to re-open for another month, but I haven’t seen this idea floated much. This idea, however, is probably closest to the spirit of the law, which is to help employers keep their employees on payroll throughout this period of closure.
Every situation is a little different, so reach out to your advisors and see what they recommend. I’ve seen dental industry professionals I trust give different advice about when to apply to the PPP. My goal here is to ensure that you know what you’re facing before applying! I’m sure more info will be available this weekend, and hopefully we will be able to make more informed decisions.
Preparing to Apply for the PPP
In the meantime, you can absolutely collect documents as you prepare to make your application. Here’s a list of documents you will likely need:
- 2019 IRS Quarterly 940, 941 or 944 payroll tax reports
- Payroll reports for a twelve-month period (ending on your most recent payroll date)
- Documentation showing the total of all health insurance premiums paid by the company owner(s) under a group health plan.
- Include all employees and the company owners
- Documentation showing the sum of all retirement plan funding that was paid by the company owner(s) (do not include funding that came from employees out of their paycheck deferrals).
- Include all employees and the company owners
- Include 401K plans, Simple IRA, SEP IRA’s
Preparing now is always a good idea, no matter when you plan on making your application.
Another Musical Interlude
I received several emails commenting on how much they enjoyed the Yo-Yo Ma video I sent out last week, so I’ve decided to send out another. This was sent to me by a dentist reading my last newsletter AND by the concert hall in an email canceling a May concert, which also happened to be my Christmas gift to my parents. Guess it’s time to do some online replacement Christmas shopping…
Here is the Rotterdams Philharmonisch Orkest playing the Ode to Joy from Beethoven’s 9th Symphony:
Click on the image above or click here for the link.
In the description of the video, the Rotterdam Symphony writes, “We’re adjusting to a new reality and we’ll have to find solutions in order to support each other. Creative forces help us…think outside of the box and use innovation to keep our connection and make it work, together. Because if we do it together, we’ll succeed.”
These words should ring true for all of us as well. The need for dental care is not going anywhere, and dentists will innovate and adapt to meet the post-COVID reality. Hang in there, stay safe, and be grateful for the little things.
Good health and best wishes to you and your families,
Trevor Kimball, PhD
President, Integrity Practice Sales