COVID-19 Update #12 from IPS
I hope all of you had a good, shorter week.
In this newsletter, I’ll cover:
- How One Dentist is Back to 100% Pre-COVID Collections
- Work From Home Front Office
- Adapting Patient Protocols
- Simple Disinfectant Solutions
- NEW PPP Legislation Passes the House
- Featured Dental Practices for Sale
- Another Musical Interlude
While the ADA’s Health Policy Institute has put out some challenging data from dentists getting back to work, I’ve seen more and more doctors climbing back towards pre-COVID numbers. Yes, there are challenges and changes, but we will keep moving forward.
Looking to the Future
Looking to the future and to the innovation driving the future is crucial in these times.
Perhaps some of you were, like me, anxiously watching the countdown to the launch of the Demo-2 mission on Wednesday, which was canceled due to bad weather at about T minus 17 minutes.
The mission will launch NASA astronauts Doug Hurley and Bob Behnken into orbit on a Crew Dragon spacecraft fixed to a Falcon 9 rocket. It is the first crewed orbital spaceflight launched from the US since 2011. The mission has been rescheduled for Saturday.
You can watch it live here: https://www.nasa.gov/nasalive
Liftoff is scheduled for 12:22 Pacific Time (3:22 Eastern). I’ll be watching! And whether or not you tune in, join me in looking towards a bright future for dentistry, despite all the many (and very significant) challenges of the last months.
In the very first edition of this newsletter, I said that I have high confidence that dentists will innovate and adapt to the new climate.
This week, I’d like to feature one dentist who has adapted well and is back to 100% of her pre-COVID collection figures, our very own IPS agent, Dr. Maricelle Ortiz-Luis.
Dr. Ortiz-Luis’ practice has been open for two weeks, was back to full capacity almost immediately, and experienced only one cancellation. She has implemented a number of steps for infection management and new protocols, some that I’d heard about, and others that were new to me (and may be new to some of you as well).
I’m sure that many of you are adopting some of these same ideas, and many of you have your own great ideas for practicing post-COVID. Please reply to this email with your own ideas, tips, tricks, etc. I’d love to share this information as widely as possible and get all of you back to a profitable practice.
Front Office Working from Home: In order to preserve precious PPE, Dr. Ortiz-Luis has her front office working from home.
They use LogMeIn, a product that allows them to – as the name implies – login directly to their office workstation from their home computer. They can use Eaglesoft and have access to all the tools they need from home, where they can respond to calls, schedule patients, and conduct financial arrangements (including collecting credit card info).
The front office still leads the morning huddle using the office speakerphone.
And using the instant messaging features of Eaglesoft, they are able to communicate easily and effectively with the back office.
As patients arrive, they call the (home) front office, who explains the new procedures and messages the clinical team that the patient has arrived.
Once the clinical team is ready for the patient, they then message the front office who then calls or texts the patient and informs them that they can enter the office.
After the patient’s appointment, the front office calls the patient to go over any new treatment plan, copay, and schedule the next appointment and recall. The appointment confirmation is texted or emailed.
Patient Flow Procedures: The patient is greeted at the door by the back-office team, who instructs the patient to sanitize their hands, takes the patient’s temperature, and goes over a Covid-19 screening form and any necessary consent form. The forms (and any checks if that’s how the patient chooses to pay) are put in a cardboard box, which is filed/deposited by the front office personnel, who come in during non-patient days.
Door Sign: The door has a sign that says, “Patients with appointments only.” It goes on: “Please do not enter without an appointment, even if you have a dental emergency. No walk-ins, marketers, or solicitors.” It then has the office phone number.
Hypochlorous Acid: As most of you are aware, hypochlorous acid has shown promise as a disinfectant against COVID. Just yesterday, it was added to “List-N,” the EPA list of disinfectants approved for use against SARS-CoV-2, the virus that causes COVID-19.
This is a powerful, inexpensive solution (Lysol can still be hard to find these days). You can make it yourself with water, salt, and vinegar using an Electrolyzed Water System like this one. As as you wait for your back-ordered fog machine, you can use a very inexpensive flairosol spray bottle.
Here’s a video about flairosol (which is not an aereosol).
I hope this is as inspiring for you as it was for me. Of course, there isn’t one single formula for success right now. But if it’s been done, it must be possible!
Chart your own course and let’s keep moving forward.
NEW PPP Legislation:
Yesterday, the US House of Representatives passed the H.R.7010 – Paycheck Protection Program Flexibility Act of 2020. While it still has a way to go in the legislative process, it has wide bipartisan support (passing 417 to 1), and I suspect it will quickly make its way to the President’s desk.
In its current form, the bill makes several changes to the forgiveness criteria, including:
- Expanding the 8-week period to 24 weeks.
- Extending the re-hiring deadline from June 30th to December 31st
- Reducing the amount required to be spent on payroll from 75% to 60%
We don’t know how the Senate will amend the bill, so don’t alter your plans just yet.
While I think these are good changes, it is difficult and frustrating to strategize for the future when the game keeps changing. Nevertheless, I think these are good changes on the whole. I hope the final version of this bill is passed quickly so that we can all make smart plans for the future.
Featured Listings
Diamond Bar General Practice
Asking Price: $370,000 | 6 OPS | Seller Net Income: $135,000
Building Type: Shopping center
Revenue Sources: FFS 30%, PPO 70%
Summary: Sleek and thoughtfully laid out practice features 6 well-equipped operatories, two private offices, pano, and a spacious waiting room. Located in a busy strip mall, the easily accessible practice has plenty of foot traffic and a large parking lot. Diamond Bar is a newer community with beautifully-planned upscale neighborhoods, outdoor recreation, and family activities. Sign the NDA and receive more information here.
San Diego General Practice
Asking Price: $1,090,000 | 7 OPS | Seller Net Income: $550,000
Building Type: Freestanding dental office
Revenue Sources: FFS 3%, PPO 30%, Indemnity 2%, Discount Plans 10%, Covered CA 25%
Summary: Paperless, up-to-date practice features seven fully equipped operatories, high-technology dental equipment, Dentrix, a beautifully-appointed office with ultra-comfortable reception area, and highly-experienced seasoned staff. This charming dental office is located in an attractive building on a main thoroughfare near downtown. It includes private on-site parking and is easily accessible from both the 5 and 805 freeways. Sign the NDA and receive more information here.
San Luis Obispo General Practice
Asking Price: $865,000 | 3 OPS | Seller Net Income: $507,000
Building Type: Freestanding dental building
Revenue Sources: FFS 3%, PPO 30%, Indemnity 2%, Discount Plans 10%, Covered CA 25%
Summary: Rapidly growing and successful GP in highly desirable San Luis Obispo! Beautiful bright and modern office features 3 equipped operatories, recently updated equipment, new 3D Conebeam, Eaglesoft, an experienced staff, and a very solid hygiene schedule. The seller is highly rated across the internet and has a tremendous reputation within the community. The office is close to historic “Downtown SLO” and is very easily accessible via the 101. Sign the NDA and receive more information here.
Sacramento General Practice
Asking Price: $534,000 | 4 OPS | Seller Net Income: $200,000
Building Type: Professional office complex
Revenue Sources: FFS 53%, PPO 47%
Summary: 45-year established General Practice in a fantastic neighborhood! Located near upscale shopping and fine dining, the office features four well-equipped operatories and a highly experienced and dedicated staff who have worked in the office anywhere from 2-30 years.
This beloved practice has a strong foundation to be tremendously profitable, and a young ambitious dentist could absolutely capitalize on this. Sign the NDA and receive more information here.
Glendale General Practice
Asking Price: $400,000 | 4 OPS | Seller Net Income: $317,000
Building Type: Shopping center
Revenue Sources: FFS 40%, PPO 60%
Summary: Now priced at 50% of Collections!! Beautiful, profitable, and recently updated General Practice in Glendale, CA. Modern, paperless office features 4 equipped operatories, Dentrix, in addition to high-quality equipment such as DIAGNOdent, Bien-Air electrical handpieces, soft tissue laser, piezo scalers, and more!! Located in a busy shopping center in a highly desirable neighborhood with plenty of free parking in an open lot. Sign the NDA and receive more information here.
Musical Diversions – Happy Friday From Ken Skeate
Get ready to get a little funky and a little soulful: Enjoy Soulful Strut by Young-Holt Unlimited!
COVID-19 Update #11 from IPS
In this newsletter, I’ll cover:
- CDA Respiratory Protection Program
- PPP Loan Forgiveness
- A Quick Reminder to Stay Vigilant
- Focusing on the Nervous Patient
- Dental Practices for Sale
- Another Musical Interlude
Best Wishes on Memorial Day
Believe it or not, this Monday is Memorial Day.
The de facto beginning of summer has taken me completely by surprise. I thought it was next week and honestly hadn’t thought much about it at all. But I’m glad it’s here. It is good to mark time, especially these days when everything seems to flow together.
On Memorial Day, we remember the courageous men and women who fought and died in the defense of our country. I’m grateful for them.
I wish all of you a good, safe, and relaxing Memorial Day!
OSHA Waives Fit Testing Requirement for N95 – But You Still Need To Take Proper Steps for Compliance
From the CDA: “Dentist employers should understand that although the required annual fit testing requirement has been temporarily suspended, they are still required to provide the initial fit test for each employee who is required to wear a respirator.
Get the CDA’s Respiratory Protection Program compliance document here.
PPP Loan Forgiveness
The PPP still has about $100 billion dollars remaining, but the hot topic this last week was loan forgiveness.
The SBA released the loan forgiveness application on May 15th. You can find it here.
Unsurprisingly, it’s a rather complex application. But it does basically confirm what we’ve been saying all along about the conditions for forgiveness.
It’s important to note here that you will be responsible for helping yourself. The bank will not fill out this application for you, and you’ll need to stay on top of this if you want to receive the loan forgiveness.
Your lender will process your forgiveness application, just as they processed your loan application, and they should reach out to you with instructions on where to apply – but don’t let too much time pass.
What are the step for determining the amount that can be forgiven?
The US Chamber of Commerce wrote a fantastic guide that can be found here. The following is from that guide:
How does the 75% rule work?
If your PPP loan amount is $100k and you spend $50k on payroll, that means that your maximum forgivable amount is $66.6k, leaving $34.4k as an ordinary loan (due in 2 years, 1% interest, 6 months of deferred payments, and no pre-payment penalty).
The formula is simply this:
[total amount spent on qualified payroll expenses] / 0.75 = maximum forgivable amount.
What counts as a qualified payroll expense?
- Compensation (not exceeding $15,385 per employee for the eight week period) in the form of gross salary, gross wages, gross commissions, and gross tips, vacation, parental, family, medical, or sick leave;
- Employer contribution for employee group health care coverage;
- Employer contribution for employee retirement plans; and
- Payment of state and local taxes assessed on compensation of employees.
Again, here’s the detailed Treasury (Official) application for loan forgiveness.
Stay Vigilant
As more and more states open for business, attitudes towards COVID are becoming increasingly relaxed. In my opinion, we should move about without fear while protecting the vulnerable to the best of our abilities. But a relaxed attitude doesn’t mean we shouldn’t still be prudent.
Consider body armor for law enforcement (police PPE). It is very unlikely that a police officer will be shot in the line of duty, but officers continue to wear body armor, even in low crime areas. Why? Because of a prudential risk assessment. They would most likely be fine without it…but you wouldn’t want to need it without having it. The same goes for seat belts in your car.
Until there is a vaccine or effective therapy, COVID will remain with us, invisible and, for some, potentially life-threatening. It’s a nasty and poorly understood disease (though our understanding increases every day). Just because anxiety levels are reducing (I think this is a good thing) doesn’t mean we should let our guard down.
This is just a simple reminder to stay vigilant with your in-office screenings, PPE, and infection control procedures.
Focus on the Nervous Patient
As with any customer service interaction, remember to gauge patient feelings and work to keep them comfortable. For some patients, this might mean taking more precautions than you personally think are necessary.
Dentists and patients are widely split on COVID-related risk tolerance. Some dentists and patients think that this entire lockdown is completely unnecessary while others will be waiting to return to practice until there are better infection control procedures in place than we have now (like point-of-care testing or a vaccine).
This is not the time to drive away any patients. Respect for your patients means making them as comfortable as possible (within reason) in your practice, especially those who are the most concerned.
ew Listings and Coming Soon
In the spirit of slowly returning to (semi-)regular business, here are some fantastic new listings that our team has brought to market in the last few weeks.
Los Angeles General Practice
Asking Price: $190,000 | 6 OPS* | Seller Net Income: $105,000
Building Type: High-rise Professional Building
Revenue Sources: FFS 30%, PPO 70%
Summary: 34-year established, 5-star reviewed, General Practice located in a very prominent, modern professional building on Wilshire Blvd.! The sunny and spacious paperless office features 6 fully-equipped operatories (2 of the operatories are currently sublet to another doctor) and he is the only dentist in the entire building! Sign the NDA and receive more information here.
Southern Central Valley Area Implant Practice – COMING SOON
5 OPS | Revenue Sources: FFS 40%, PPO 51%, Denti-Cal/Medi-Cal 9%
Building Type: Shopping Center
Oceanside General and Implant Practice – COMING SOON
4 OPS | Building Type: Strip mall
Tracy General Practice – COMING SOON
Musical Diversions – More Yo-Yo Ma
Stay safe out there.
Good health and best wishes to you and your families,
Trevor Kimball, PhD
President, Integrity Practice Sales
trevor@integritypracticesales.com
COVID-19 Update #10 from IPS
Another week has passed as many of you start to open your doors a little wider and see more and more patients. We are rooting for you – feel free to reach out and let us know how it’s going!
In this newsletter, I’ll cover:
- The Practice Sales Market – Should I sell now?
- Finding PPE
- Fit Testing N95
- Is the PPP Taxable?
- Dental Practices for Sale
- Another Musical Interlude
Work From Home Update
The IPS team is continuing to thrive from our home offices, living rooms, and kitchen tables. The commute has been rather nice, but we do miss seeing each other!
One BBC Sports commentator has extended the possibility of Zoom meeting by hosting a work meeting with his…co-workers? I’m not sure where we go from here…enjoy!
The Practice Sales Market
At Integrity Practice Sales, we’re fielding lots of questions about the state of the dental market.
If this pandemic has taught us anything, it’s that predicting the future is dangerous business. At the beginning of January, I wrote a very optimistic article about the dental practice sales market in 2020. Soon after, the market met the coronavirus. We have still been accepting offers and moving through due diligence with a number of doctors, but most (not all, but most) transactions have paused at the finish line
The true risk is always the thing you didn’t see coming. But I have high confidence in the following:
The Demand for Dentistry is Delayed, Not Lost
The current crisis has hit different industries differently. Unlike many restaurants, maid services, Uber and Lyft, etc., lost revenue in the dental practice is not gone forever. Jim’s tooth still has that same decay, Martha’s gums still have periodontal disease, and there will still be patients who are excited to get straighter, whiter teeth. While a few patients may hold off on some elective procedures, revenue for dentists has been delayed, not lost.
Many Associate Dentists (Buyers) Want More Control
I’ve spoken to a number of buyers recently who are furloughed and unsure about whether they will be rehired in their corporate jobs. Many of these doctors are now looking to purchase a practice. Ownership is not for everyone, but it provides clear and significant financial advantages while allowing you to control your own schedule, treatment plans, workspace, and team.
The buyer pool has not dried up. To the contrary, there are many eager buyers who have been considering a practice purchase for years and are now ready to make the final step to practice ownership.
Banks Will Continue Lending
Banks control most of the available capital for practice acquisitions. While some lenders have temporarily halted activity, others continue making loans.
Remember that dentists have some of the lowest default rates of all business borrowers, so banks still love dentists.
The banks want to lend to you. And with the historically low interest rates, practice values should remain high so long as revenue and net income figures return to within the range of normal (factoring for one-time equipment expenses, expanded PPE expenses, and new protocols).
If You’re Considering a Sale, Now Might Be a Great Time
The right time to sell your dental practice is always when you’re actually ready to sell.
But here is one thing to keep in mind: we’re currently selling practices based on 2019 financial figures. The banks use tax returns as the ‘document of record’, and if you list your practice in the next few months, it is likely that you could walk away (if that’s the transition plan you want to pursue) well before your 2020 tax return comes into play.
Selling next year (in 2021) may be more challenging because the banks will be looking at your 2020 tax return, which will probably not show the same levels of income as 2019.
That being said, don’t be scared off by brokers saying that you won’t be able to sell in 2021 (I’ve seen some variation of this multiple times now). One important principle in valuing any business is making an adjustment for non-recurring events like settling a lawsuit, making a large equipment purchase, or, in this case, closing your office completely for a number of weeks because of a pandemic. It may be a little easier to sell this year, but I don’t see practice sales falling off a cliff next year because underwriters at the bank can’t wrap their heads around an adjustment for weeks of practice closure and new infection control protocols.
The most important thing you can do now is focus on getting your practice back up and running and your bank account filling back up.
Finding PPE – Try the MHOAC
The CA Department of Public Health has required dental practices to carry two weeks’ worth of PPE. And as you’re well aware, PPE can be difficult to get your hands on right now.
I’ve heard some doctors say that they will be ordering PPE from their supply reps, even if that means re-opening a little later than they might otherwise. If you order from Patterson or Benco or Schein, you know you’re receiving a quality product and there is a high likelihood that the supply will continue.
While I completely support that move, I’d like to also point to you another resource that lots of doctors have overlooked. The CA Department of Public Health listed a number for your local Medical Health Operational Area Coordinator (MHOAC)here. I’m not sure how helpful they will be, but at least it’s a lead. Let me know if you’re successful.
Fit Testing N95 Masks
Here’s a link to an OSHA video explaining the process.
From OSHA’s website: “A “fit test” tests the seal between the respirator’s facepiece and your face. It takes about fifteen to twenty minutes to complete and is performed at least annually. After passing a fit test with a respirator, you must use the exact same make, model, style, and size respirator on the job.
You may also want to look into this interesting option: https://bellus3d.com/solutions/facemask.html
Is the PPP Taxable?
There is some confusion right now whether business expenses that are paid for with a forgiven PPP loan will lose their tax-deductible status. I didn’t put too much stock in this (and didn’t look into it very closely) because it seemed so contrary to the stated goals of the PPP.
While it’s very unclear how this will end up, do reach out to your CPA and make a plan for moving forward.
New Listings
In the spirit of slowly returning to (semi-)regular business, here are some fantastic new listings that our team have brought to market in the last few weeks.
Monterey Peninsula General Practice
Asking Price: $379,000 | 3 OPS | Seller Net Income: $193,000
Building Type: Freestanding Dental Office
Revenue Sources: FFS 100%
Summary: 70-year established, 100% fee-for-service general practice in a highly coveted location. The current owner has been here for 33 years and the office is considered a mainstay in the community. The office features 3 equipped operatories, a consultation room, and a lab. Sign the NDA and receive more information here.
Ventura General Practice
Asking Price: $550,000 | 3 OPS | Seller Net Income: $350,000
Revenue Sources: FFS 41%, PPO 59%
Building Type: Medical Building
Summary: Very profitable, 36-year established GP in the charming seaside city of Ventura. Consistently successful, modern practice features state-of-the-art equipment and a highly skilled team performing both traditional dentistry as well as cutting-edge procedures! Sign the NDA and receive more information here.
Sacramento General Practice
Asking Price: $534,000 | 4 OPS | Seller Net Income: $200,000
Revenue Sources: FFS 53%, PPO 47%
Building Type: Professional Office Complex
Summary: 45-year established General Practice in a fantastic Sacramento neighborhood! This beloved practice has a strong foundation to be tremendously profitable, and a young ambitious dentist could absolutely capitalize on this. The seller has spent a lifetime carefully building trust within the community and there are only positive opportunities here! Sign the NDA and receive more information here.
Menlo Park General Practice – BACK ON THE MARKET
Asking Price: $150,000 | 3 OPS | Seller Net Income: $77,000
Revenue Sources: FFS 35%, PPO 50%, Denti-Cal 10% (pedo only)
Building Type: Medical Building
Summary: Fast-start GP in highly desirable Menlo Park. The practice features three fully-equipped operatories, pano, and a large underground parking lot. Most of the patients have been with the doctor for 10-15 years and Stanford Hospital refers patients on a regular basis. This practice would benefit tremendously with some fresh, thoughtful advertisements and social media activity! Sign the NDA and receive more information here.
Musical Diversions – Today Feels Like a Friday
Alright…it’s time for something completely different. For some reason, today feels more like a real Friday than just-another-day-as-I-work-at-home kind of day.
In honor of that Friday spirit, here’s a well-known track by Norwegian DJTodd Terje called Inspector Norse. If you listen all the way through and aren’t feeling a little more upbeat, I’ll refund you the price of this newsletter. Enjoy!
Stay safe out there.
Good health and best wishes to you and your families,
Trevor Kimball, PhD
President, Integrity Practice Sales
trevor@integritypracticesales.
COVID-19 Update #9 from IPS
Dear friends, partners, and colleagues,
We are – slowly, cautiously – on our way back!
In this newsletter, I’ll cover:
- The CDPH Announcement
- PPP Loan Forgiveness Questions
- Re-hiring Employees (including those who decide not to return)
- Dental Practices for Sale
- Another Musical Interlude
In the meantime, I cannot believe that another week has passed. I am very much in need of a haircut.
Perhaps I should take my cue from Pawnee, Indiana’s premier orthodontist Dr. Jeremy Jamm and give myself a quarantine cut. He is also promoting dental delivery services. Maybe it’s time to change the business model? Take a look…
CA Dental Updates
By now you’ve probably seen CDA President Dr. Richard Nagy’s announcement that dentists have the “yellow light” to practice dentistry with reference to the CDPH’s for Resuming Deferred and Preventive Dental Care. (If you haven’t seen it, you can find it here.)
Remember: this is just a guideline. The CDA is not a regulatory body and as a healthcare provider, you are responsible to make your own decisions about how and when to be practicing, subject to applicable CA law.
The substance of the “yellow light” is given by the California Department of Public Health’s Guidance for Resuming Deferred and Preventive Dental Care, which was released last night. (I had some trouble accessing the site, so if you’re having the same trouble, here’s a PDF of the page that I printed.)
It’s worth reading the entire thing (and I suspect that most of you already have). In essence, the guidance is fairly simple:
- Follow local guidelines
- Have sufficient PPE
- Screen everyone and don’t treat COVID positive patients
- Develop policies and procedures to reduce possible transmission
- Reduce aerosol generation as much as possible
- Clean and disinfect all office spaces
Basically, it’s everything we’ve been discussing for the last few weeks. In terms of which patients you should prioritize (see our discussion last week on ‘triaging’ patients), “Clinicians should prioritize care that was previously postponed and for those conditions that are likely to lead to dental emergencies if treatment is not provided in a timely manner.”
PPP Loan Forgiveness
I’ve heard a lot of confusion over the last few weeks around PPP loan forgiveness. There’s a simple reason for this: the guidance from the SBA and the Treasury has been confusing and they have yet to issue the IFR (interim final rule) on forgiveness.
In the meantime, here’s what we do know about PPP loan forgiveness:
The percentage of the loan that is forgiven can be reduced by a number of factors.
- The forgiveness window is the 8-week period beginning as soon as the funds are deposited in your bank account. That means that any PPP loan money that is spent after that 8 weeks is not eligible for forgiveness.
- Within that 8-week window, you can spend a maximum of 25% of the total loan amount on qualified non-payroll expenses (utilities, rent, and mortgage interest). If you’re looking for total forgiveness, at least 75% of the loan must be spent on payroll.
So far, so good. The loan was designed to get employees off of unemployment and back to work. However, there is more uncertainty about the requirements to bring employees back at their former salary levels.
- For full forgiveness, you are required to maintain at least 75% of individual employee salaries compared to the most recent full quarter prior to the origination date of the PPP loan.
- For full forgiveness, you are required to maintain employment levels when compared to one of two periods (your choice): either Feb. 15, 2019 – June 30, 2019, or Jan. 1, 2020 – Feb 29, 2020.
What does maintain mean? 1) It is unclear whether we are talking about headcount or full-time equivalent (FTE). (If you have 4 half time employees, that is the same as 2 FTE employees.) 2) It is unclear whether employment levels are calculated as an average over the 8 weeks or by June 30, 2020. Without clarification on these points, it’s hard to make good decisions about when to re-hire.
I wish I had more advice to offer here, but the primary take away is this: no one knows what the final rule will be. Be wary of anyone who says that they have all the answers right now…
Can employees who decide not to return jeopardize my loan forgiveness?
If your employee refuses your offer to re-hire them, then that employee cannot count against ‘maintaining’ employment levels with regards to your forgiveness. In other words, an employee who refuses to come back to work after his or her employee makes a good faith, full-wage offer to rehire cannot be counted against the employer’s loan forgiveness.
This is new as of this week: see question #40 here. Furthermore, if they do refuse the offer to return to work, you may have an obligation to inform the state and it can put their unemployment in jeopardy.
New Listings
In the spirit of slowly returning to (semi-)regular business, here are some fantastic new listings that our team have brought to market in the last few weeks.
San Diego General Practice
Asking Price: $1,090,000 | 7 OPS | Seller Net Income: $550,000
Building Type: Freestanding Dental Office
Revenue Sources: Mix of Fee For Service and PPO
Summary: This location has been a dental office for over 50 years, is considered a mainstay in the community, and has a stellar reputation for giving high-quality, gentle dental care. Beautifully decorated, paperless, up-to-date practice features seven equipped operatories and high-tech dental equipment. Sign the NDA and receive more information here.
Vista General Practice and Real Estate
Asking Price: $100,000 | Building: $390,000 | 3 OPS | Seller Net Income: $53,000
Revenue Sources: FFS 60%, PPO 25%, Capitation 15%
Building Type: Freestanding Dental Office
Summary: Modest, recently updated, 64-year established dental office with real estate available. If you have an existing practice in the area with a lease expiring soon, bring your patients to this location and merge offices! Sign the NDA and receive more information here.
Chula Vista General Practice
Asking Price: $415,000 | 5 OPS | Seller Net Income: $215,000
Revenue Sources: FFS 55%, PPO 43%, Capitation 2%
Building Type: Medical Complex
Summary: Updated, modern, and paperless 5-operatory practice located in a prominent medical building features stunning picture windows in every operatory that highlight its beautiful surroundings, a large executive office, an open floor plan, and a fantastic reputation within the community. Sign the NDA and receive more information here.
Hollywood General Practice
Asking Price: $625,000 | 5 OPS | Seller Net Income: $310,000
Revenue Sources: FFS 30%, PPO 70%
Building Type: Shopping Center
Summary: Profitable, paperless office features an updated computer network and 4 operatories are equipped with brand new, computers, & monitors. Two of the operatories received brand new chairs, lights & units, and Kavo electric motors and handpieces. Upgrade was completed early 2020 and no expense was spared! Sign the NDA and receive more information here.
Vacaville General Practice
Asking Price: $650,000 | 4 OPS | Seller Net Income: $308,000
Building Type: Medical/Retail Building
Summary: The beautiful office is located in a modern and attractive freestanding medical/retail building within a very busy shopping center with several popular big-box anchor stores. The busy office features 4 equipped operatories, Eaglesoft software, and operates very profitably on an ultra-comfortable 3-day work week! Sign the NDA and receive more information here.
Los Alamitos General and Cosmetic Practice
Asking Price: $1,650,000 | 7 OPS | Net Income: $802,000
Revenue Sources: FFS 63%, Insurance 34%, Care Credit 3%
Building Type: Professional Medical Building
Summary: Stunning, ultra-profitable, one-of-a-kind practice features 7 fully equipped operatories, pano, Dentrix, in a generous 1,950 square feet. The high-end office is full of modern amenities and needs absolutely nothing but a passionate new owner!
The office has a reputation for being the place to go for highly aesthetic cases. They specialize in cosmetic dentistry, as well as Invisalign, implants, and more. Sign the NDA and receive more information here.
Huntington Beach Lease – Two Dental Suites Available
Asking $2,129/month | 3 OPS – Get More Info
Asking $2,789/month | 4 OPS – Get More Info
Summary: The offices are located directly off of the 405 in a very busy retail corridor across the street from the highly-trafficked Westminster Mall. The building sees over 276,000 vehicles per day in this prime location with high visibility and access from Bolsa Ave and Edwards Street.
Musical Diversions
Once again, Yo-Yo Ma…this time at a Tiny Desk Concert. This is a classic, low-key performance that not only highlights Ma’s musicality, but also his humility and kindness. Enjoy!
Stay safe out there.
Good health and best wishes to you and your families,
Trevor Kimball, PhD
President, Integrity Practice Sales
trevor@integritypracticesales.com
COVID-19 Update #8 from IPS
Hello again from my kitchen table to yours,
I hope you all are remaining healthy and well as we close the book on the 3,000 days of April 2020. What a strange month it’s been.
The good news is that I have been talking to many doctors getting ready to return to practice. There is light at the end of the tunnel.
In this newsletter, I discuss:
- Re-hiring Employees
- Triaging and Categorizing Patients
- The ADA Return to Practice Toolkit
- Ultraviolet LEDs
- PPP Loan Guidance for Self-Employed
- Pandemic Unemployment Assistance for Business Owners/Self-Employed
As always, please forward this email to anyone who you think may benefit.
Hiring Employees Back Part-time Can Cause Challenges for their Unemployment
This last week we’ve helped a few doctors start to re-hire employees. Just as a heads up, it’s generally better to bring back a smaller team full-time than a half team part-time from the team’s perspective. It makes it much more complicated to collect unemployment if you have a part-time position, so it’s better to go all in.
And if you’re choosing who to re-hire, ask your team about who feels comfortable returning to work. It’s likely that some team members will feel more comfortable than others, and it makes the most sense to bring back those who are ready to return.
Triage and Categorize Your Patients
When you re-open, don’t plan to just start seeing the patients on the schedule. You’ll need a plan to triage your patients and make sure that the most important, urgent dentistry gets completed first. This means that you’ll need to clear your schedule of routine patients for, say, the next two weeks. We’ve been seeing this work well in real-time.
Then look back at the patients with canceled appointments and break them into groups. Prioritize emergencies and urgent dentistry. Don’t see any patients for routine dentistry until you’re more comfortable with the new schedule and you’ve seen all the patients with urgent treatment requirements.
Here’s how I’m seeing it work in a few offices: Once you bring your staff back, you have a day or two of training and re-organization. On your first day seeing patients, you see only 2 or 3. The next day you add another patient, then another, and so on until you get more comfortable with the new procedures.
This is uncharted territory, so we don’t know what an ideal schedule looks like yet. And patients understand that businesses are in flux. At this point, we recommend putting patients on lists rather than trying to reschedule them.
ADA Return to Work Interim Guidance Toolkit
I suspect that most of you have seen this, but in case you haven’t, here you go. This is a fantastic resource that includes:
- Sample letter to patients
- Guidance on pre-appointment screening
- In-office patient registration procedures
- Reception area preparation strategies
- Chairside checklist
- Staff protection strategies
- Supplies shopping list
Here’s the link to get the toolkit. (They do ask for your email address.)
Ultraviolet LEDs
I’ve been learning more about UV light and it’s applications for dental practices – it’s fascinating stuff!
From an article: “One major application is in medical situations — the disinfection of personal protective equipment, surfaces, floors, within the HVAC systems, et cetera,” said materials doctoral researcher Christian Zollner, whose work centers on advancing deep ultraviolet light LED technology for sanitation and purification purposes. He added that a small market already exists for UV-C disinfection products in medical contexts.”
There are lots of options out there and I’m not ready to make recommendations yet. If anyone has more info, please let me know. And be a little wary of the wands. If they are effective, it’s only after holding it in place for 10 seconds. At that rate, it’d take ages to disinfect an operatory.
Independent Contractors/Self-Employed are Eligible for the PPP (with no employees)
If you haven’t applied for the PPP yet, there is still time. Most practice owners I have spoken to recently have applied, but many associates don’t realize that they are eligible.
On April 24, the Treasury released more comprehensive guidance about how to calculate loan amounts for all borrowers, including independent contractors. See the guidance here.
“Your 2019 IRS Form 1040 Schedule C must be provided to substantiate the applied-for PPP loan amount. You must also provide a 2019 IRS Form 1099-MISC detailing nonemployee compensation received (box 7), invoice, bank statement, or book of record establishing you were self-employed in 2019 and a 2020 invoice, bank statement, or book of record establishing you were in operation on February 15, 2020.”
Smaller lenders remain a better bet for timely application processing. I’ve had good luck with Ready Capital (you can reach out to Dan Bywater at Dan.Bywater@readycapital.com).
Pandemic Unemployment Assistance (PUA)
“If you are a business owner, independent contractor, self-employed worker, freelancer, or gig worker and only received a 1099 tax form last year, you are most likely eligible for PUA. You can apply for benefits starting April 28.” Here’s the site: https://unemployment.edd.ca.gov/guide
To be eligible for PUA, you must meet any of the following criteria:
Any criteria related to changes in employment status due to COVID-19
- You had a definite date to begin work, but the job is no longer available, or you could not reach the job as a direct result of COVID-19.
- You are unable to travel to your job as a direct result of COVID-19.
- You quit your job as a direct result of COVID-19.
- Your workplace is closed as a direct result of COVID-19.
- You are self-employed or work as an independent contractor (with reportable income, such as a 1099) and you are unemployed, partially employed, or unable to work because COVID-19 has forced you to stop working.
Concluding Thoughts
I hope everyone is continuing to stay sane. This week we’re back to Yo-Yo Ma and his Songs Of Comfort. From the video: ❤️ For the canceled weddings, separated lovers, new loves found, and loved ones near and far. This is Elgar’s “Salut d’Amour.” #songsofcomfort ❤️
Here’s the link. Enjoy!
Good health and best wishes to you and your families,
Trevor Kimball, PhD
President, Integrity Practice Sales
trevor@integritypracticesales.com
COVID-19 Update #7 from IPS
Dear friends, partners, and colleagues,
It’s been another strange week in topsy-turvy world. I hope you’re all doing as well as possible.
This week I’ll be covering:
- Lender Updates
- A Road Map for Reopening
- CDA Near Term Recommendations
- Aerosol Reduction and Elimination Options
- COVID-19 Specific Procedures and Protocols
- Ideas about Scheduling
- And Another Musical Interlude
As the situation continues to unfold, we will do our best to bring you important news and updates. Please feel free to forward this email to anyone else you think may benefit.
An Update from the Beach
As we spend more time indoors, perhaps some of you have pulled out old games. Last weekend I tried playing computer games with a friend, and, while it was fun to catch up, it turns out that I’m not very good at computer games.
Other games are just less fun these days. For example, with the beaches mostly empty, it’s been easier than ever to spot the elusive Waldo…
An Update on Available Lending
The PPP should reopen on Monday. Just a few hours ago the President signed into law an additional $310 billion for the PPP and $60 billion for the EIDL.
If you are planning to apply and don’t currently have a pending application, here’s a list of lenders. As I’ve said in these past newsletters, if you have a relationship with a lender, it can certainly help.
After considerable backlash, ShakeShack and Ruth’s Chris decided to return their collective $30M in loans from the PPP program. This is great – and probably enough to fund just about 1/6th of the loans for the dentists reading this newsletter.
A Roadmap for Re-opening
Today’s newsletter is primarily dedicated to a checklist of things to consider as you prepare to reopen your practice and resume practicing dentistry.
COVID-19 is going to change dentistry, especially for the next few months and probably up to and through the development of a vaccine or other effective therapy.
But just because it’s going to change, does not mean that dentistry is no longer a fantastic career path. The changes will be more like flying after 9/11. We still fly, but we now have the TSA and are accustomed to arriving to the airports early for screening.
Your patients are already getting prepared for the new reality every time they visit the grocery store.
They will not think it’s strange that you’re asking them to wait in their car or exit out the back door – in fact, I suspect that most of them will appreciate it. Many of your patients will want visible signs that you’re taking this very seriously, so it will be important to clearly communicate the changes in protocols and procedures to your patients.
So what are these changes?
Here’s a relevant paragraph from the CDA Return to Practice Roadmap issued April 17th:
“While many details still need evaluation, what is certain is that significant steps must be taken to restart the broader economy and dentistry. Providing frequent close-contact, high-aerosol procedures that are common in dentistry will require meeting several conditions. The two most vital components are the wide availability of rapid testing and sufficient availability of PPE, which unfortunately do not exist currently. Until they do, recommendations about patient care will continue to include functioning in a highly restricted environment.”
What does this ‘highly restrictive environment’ look like?
Here are the CDA’s ‘near term’ recommendations for dental practices:
Dental personnel must have:
- Access to appropriate and plentiful PPE to protect against potentially infectious aerosol transmission.
- Viable options for eliminating, reducing or containing aerosol production during care.
- Access to training on COVID-19-specific protocols and procedures.
We can take these three points one by one.
PPE:
- Ideally, N95 or KN95 masks should be worn by all clinical team members.
- Face shields should be worn for all high splatter situations.
- Consider disposable gowns and hair bouffants and/or onsite laundering.
Here are the ADA Mask and Face Shield Guidelines.
And here’s an informative OSHA webinar from Patterson Dental and The Shield Group.
Aerosol Reduction and Elimination Options:
Negative pressure rooms: While dental offices will likely never have true hospital-grade negative pressure rooms, understanding the basic concept can help improve treatment areas. The idea is to create airflow from the hallway into the operatory door, then out through a ventilation system or fan.
In its simplest from, when you close the door of your bathroom and turn on the fan, you have created a negative pressure room. The air enters below the closed door and exits through the fan on the ceiling.
If you add doors to operatories and install exhaust fans, you can begin to control the airflow.
Since most of you don’t have doors on your operatories, then at least making sure there is a vent removing air from the operatory would be better than nothing. Of course, open concept operatories will be almost impossible to create negative pressure in.
Room Filtration: Another step to control aerosol is an air disinfecting purifier such as the ADP-70. These can filter all of the air in a typical operatory every 10-15 minutes.
External and Bite Block Suction:
External Suction:
http://www.adsequip.com/
https://dentairvac.com/index.html
Bite Block Suction:
Isolight- https://www.zyris.com/
DryShield- https://www.dryshield.com/
Kona Adapter- http://www.konadentalproducts.com/
Mirror / Suction:
Purevac HVE: https://www.youtube.com/watch?v=ogLjijn4HfU
COVID-19 Specific Protocols and Procedures
Just like many of you did with HIV/Aids in the early 90s, it’s time to upgrade your universal precautions.
Here are some suggestions for risk assessment and the appropriate protocols:
Minimize Contact Points:
- What are the patient contact points in your practice? Consider every spot the patient comes in contact with: door handles, counters, etc.
- If you can leave the door from reception to the hallway open, do it to avoid additional contact points.
- Install hand sanitizer stations at each contact point.
Room Preparation:
- Turn the reception area and restroom like you would the operatory.
- Get rid of magazines, coffee station, etc.
- No toothbrushing or mouth washing in the restroom.
- Space out reception room seating and other furniture to promote social distancing.
- Consider changing patient flow from front to back exit (one-way travel).
- Set aside special times for older patients and/or immunocompromised/patients with potential co-morbidities.
- Operatory set up should be completed before the patient arrives but not more than 5 or 10 minutes before, so that aerosols have less chance to settle.
- Keep operatory cabinets closed during treatment and aerosol creation.
Screening for Team and Patients
- If you can, arrange for a contactless patient check-in. If you ask patients to call or text when they arrive, you can then inform them when you’re ready for them so that there’s no waiting.
- Daily temperature checks for staff and checks for patients before entering the practice are the new normal. Search ‘Non Contact Thermometers” on Amazon. There are lots of options around $100.
Here’s information from the ADA on what to do if you or a staff member test positive for COVID.
Thinking About the Schedule
- Stagger appointment start times and dismissal times across hygiene and restorative to prevent grouping at the front desk and in hallways or reception.
- Consider adding extra hours, especially as people are anxious to get back to work themselves. Your patients will probably appreciate early or late hours.
- “Triage” patient care by scheduling the larger appointments first for the doctor and perio maintenance or root planing rather than prophies for the hygienists.
I know it’s a lot, but we’re in this together and we WILL make it through. Your supply reps will have lots of good information on all of this as well.
Concluding Thoughts
I hope everyone is continuing to stay sane at home. This week I’m ending with a different sort of musical diversion…we’re going from Yo-Yo Ma to Lady Gaga.
Here is Lady Gaga herself, singing ‘Smile’ – something we could all use more of these days. Enjoy!
Stay safe out there.
Good health and best wishes to you and your families,
Trevor Kimball, PhD
President, Integrity Practice Sales
trevor@integritypracticesales.com
COVID-19 Update #6 from IPS
I don’t know about you, but I feel like I’ve been using acronyms more than usual. There’s the PPP and a shortage of PPE, EIDL grants from the SBA, the CARES Act and the most recent IFR (Interim Final Rule). Even COVID-19 is an acronym for coronavirus disease of 2019.
We use acronyms as a shorthand, and it’s nice not to have to use the whole phrase over and over. But it’s also important to keep in mind the people behind the letters: the owners and employees who are looking for their paychecks (PPP), the spouses, friends, and colleagues being protected from disease (PPE).
This is a human moment, and it’s going to take our shared humanity to overcome it. We will get through this.
If you haven’t reached out to your furloughed employees and your patients recently, send out an email, film a short video, make a phone call – do what you can to stay connected. People will remember it.
If you’re looking for a textbook example of this, check out this video from Dr. Samni. I don’t know him, but this video was forwarded to me, and I think it’s an incredible example of a real, human moment from a doctor to his patients.
The PPP Runs Dry…for now…
As I’m sure you’ve all heard, the initial $349 billion allocated to the program has now run dry. I remain somewhat optimistic that Congress will approve more funds, but it’s been a frustrating experience.
And it’s especially infuriating when businesses like Shake Shack and Ruth’s Chris receive $10 million and $20 million from the PPP – despite being part of publicly traded companies with well over 500 employees (they each have over 6000 employees!).
Still, we press on. At this point, my best advice is to wait and prepare.
If you’ve already been approved, be sure you carefully allocate the funds for maximum loan forgiveness (and avoiding charges of fraud – remember, this is a loan for a specific purpose, namely to keep employees employed).
If you haven’t yet applied or been approved, make sure you have everything ready (I have more info about this in a past newsletter here).
Survey Results
Last week I put out a survey, and we had about 120 dentists respond. Here are some of the highlights.
How busy do you expect to be after reopening? While 14% of practice owners responded that they expected to be VERY busy after reopening, there was a pretty even split between those practice owners who thought they would be similarly busy or busier (52%) and those who thought they would be less busy (48%).
If you have a loan on your practice, were any of your payments deferred? Of doctors with loans, 63% had a payment deferred, while 37% did not.
Practice Owners: Have you applied for any of the SBA loans? Most have applied for both the EIDL and the PPP, with 79% of respondents saying that they applied for the EIDL and 86% for the PPP.
Future Practice Acquisition Plans Of the dentists who did not own practices, the percentage who were absolutely sure they were going to purchase a practice went from 70% pre-COVID to 25% now. This looks bad, but the majority of those doctors hadn’t decided never to purchase -they had just taken a step back to re-evaluate (65% indicated that they were still very likely to purchase a practice in the future, down from 85% pre-COVID). Interestingly, many of the practice owners commented that they were looking to purchase an additional practice.
Future Practice Sale Plans: About 15% of dentists are thinking that they will delay their sale because of COVID and 5% will be selling earlier than they planned. The other 80% were either unsure or had not changed their plans.
If you had to guess, when do you think you’ll re-open. June 1st was the most popular answer by far, with May 4th and 10th coming in second and third place.
Planning for the Future
I was interested to see how divided opinions were about their levels of busyness after reopening, but this also speaks to the fact that we just don’t know. On the consulting side, we are advising clients to make two plans for reopening: one for if patients are all ready to return and the schedule fills itself, and another plan for if patients are skittish and the schedule is difficult to fill.
Take some time and make sure that you have a plan for both instances. Next week we’ll be publishing some more advice around post-COVID planning for your practice.
Through all of this, it’s important to remember:
- Your patients are still going to require dental care.
- You are innovative and will adapt to new circumstances.
- The dental industry has been recession-resistant. It’s a big ship that doesn’t change course easily.
- The weeks and months ahead will be tough, but we WILL make it through this together.
The Most Recent Patient Screening and PPE Recommendations from the CDA and CA DPH
CDA: “Dentists must be available to their patients of record for emergency care or have arranged coverage with another dentist. Emergency dental care for patients who are screened and do not report COVID-19 symptoms or exposure can be managed by a dental office.” You can read it all here.
Another Musical Diversion
Another week, another Yo-Yo Ma clip. This is probably the most famous piece of music for cello ever written. In the description of the video, he writes: “This music has been with me for 60 years. It’s seen me through times of stress, loss, joy, and transition. It’s connected me to others all over the world, and helped me to understand life in new ways.” Here’s the link!
President, Integrity Practice Sales
trevor@integritypracticesales.com
COVID-19 Update #5 from IPS
Dear friends and colleagues,
Chag Sameach and Happy Easter! Another momentous week in this on-going saga has come to a close. It is a strange time to be celebrating a holiday, but – celebrating or not – this is an especially good time to take a moment and be grateful for the many blessings that we continue to enjoy, even in the midst of a very challenging time.
Once again, here is the Friday roundup of the latest news, some helpful info, and a bit of fun (including a way to measure the speed of light with a microwave and a chocolate bar).
Survey of Dentists Re: Covid-19
Yesterday we launched an anonymous survey to gauge your thoughts and feelings about the current pandemic. I’ve already received lots of helpful responses, and I’d love to hear from more of you!
If you haven’t already, please take 5 minutes to fill out our survey.
New SBA Database of PPP Lenders
If you are still looking for a lender for the PPP, the SBA has just released a helpful new database of banks participating in the program. Just enter your zip code and you’ll be directed to banks in your area.
Federal Student Loan Payments POSTPONED
From March 13 (retroactive) to September 30th, the federal government is providing automatic forbearance to all federal loan borrowers. This means that your loan payments have been suspended. The government is also waiving your interest and ceasing all collection activities on loans in default.
If you’d like more information, here’s a helpful article.
When should I apply for the PPP?
As I mentioned last week, timing is critical for the PPP loan. As soon as you receive the loan, the clock starts on an 8-week period. During those 8 weeks, the PPP money you spend on qualified payroll expenses and some other expenses (lease, utilities, mortgage interest – up to 25% of the total loan amount) will be forgiven.
So when does the 8 week period start? According to new guidelines issued on April 8th, “The eight-week period begins on the date the lender makes the first disbursement of the PPP loan to the borrower. The lender must make the first disbursement of the loan no later than ten calendar days from the date of loan approval.”
In other words, once the bank has approved the loan, you must receive the funds and start the 8 week period within 10 days. So, as we thought before, it is probably a good idea to wait until you are closer to opening.
That said, the money is running out. We are very hopeful that Congress will allocate additional funds towards the PPP, but the most recent efforts have stalled out. I still remain optimistic, and I think the political will is there. You can see more information about the loan forgiveness from the SBA guidelines here.
What does this mean for the practice sales market?
I’ve been getting this question a lot right now. Will my practice be worth less? Are buyers more reluctant? Will more dentists be looking to sell?
The most honest and realistic answer is that I’m not 100% sure. But I do have high confidence in a number of things. First, as I keep mentioning over and over, the demand for dentistry is not going away. Dentists have improvised and adapted to new infection control procedures before, and you will be able to do it again. There is a tremendous backlog of patients who will be anxious to get in once you re-open.
We have received full price offers for practices in the last two weeks (including one more last night), with the closing timeline subject to the lifting of the shelter in place order. Some lenders are still moving forward with the same underwriting standards in place. While much of the industry is paused, we haven’t stopped working for our clients.
In terms of valuations, I personally don’t see the multiples that we generally use for valuations changing. For example, the quickest, down and dirty metric for a back of the napkin valuation on a practice doing less than $1.5M in revenue is 2x your discretionary income (doctor salary + business profit + perks run through the business + depreciation and interest). I don’t see this changing drastically.
I think the lending and valuation community will agree to ignore (or strongly correct for) March, April, and May of this year when looking at seller financial statements. The actual value of your practice will continue to be most directly related to cash flow (your income), so prepare to add some hours/days to your regular schedule when you return!
Determining the Speed of Light with Chocolate and a Microwave
I saw this very fun set of 44 science and engineering challenges this week and thought I would pass it on.
Produced by the James Dyson Foundation (vacuum cleaners are apparently rather lucrative!), the challenges are ostensibly “for kids”, but I might try some this weekend!
If you’re looking for fun ways to ignite some curiosity with the kids at home, check this out! Click here to see the challenges. The speed of light one is #13.
Another “Song of Comfort” from Yo-Yo Ma
At this point, these Yo-Yo Ma videos are basic obligatory. Here’s the link. Enjoy!
Good health and best wishes to you and your families,
Trevor Kimball, PhD
President, Integrity Practice Sales
trevor@integritypracticesales.com
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
trevor@integritypracticesales.com
COVID-19 Update #3 from IPS
Dear friends and colleagues,
I’m back with another update. This will be a quick one (and I’ll still be back with my Friday email), but with everything unfolding at breakneck speed, waiting until Friday for another update seemed like a bad idea. Here’s the news in a nutshell:
There are two programs for emergency lending right now through the SBA. The ADA and the ADCPA have provided a helpful summary for dentists here.
This covers the basics, much of which I covered in my email on Friday. However, we do have some new information.
$10,000 Grants?
First, a reminder that the $10,000 grants through the EIDL (Emergency Injury Disaster Loan) that everyone is talking about may not be $10,000. The actual text reads up to $10,000, so don’t be surprised if you receive $500. Of course, there’s nothing wrong with a $500 grant…unless you were expecting/counting on 20x that. Hope for the best, prepare for the worst. We’ll see in a day or two when those grants start coming in. If you want to apply, the ADA summary above is helpful, and you can start the process here: https://covid19relief.sba.gov/
Starting the PPP Application
Second, the PPP (Paycheck Protection Program) administered through SBA-partner banks is still in the rules-creation process as the SBA and banks set up the program. So what can you do now? Talk to a lender who does SBA 7(a) lending and start building that relationship. When it comes to lenders, it is always best to go with the ones you know (and who know you). Here’s a list of the 100 most active institutions offering SBA loan products. If you personally know anyone at one of these banks, or have an account with them, I would start there. If you would still like a recommendation, please feel free to reach out.
Furloughed Employees and PPP?
Third, we are still learning about the PPP. This is the program with loan forgiveness if you continue to pay your employees. But it’s not clear what happens – or how much forgiveness you are eligible for – if your employees are furloughed for part of this time. It may be that you take a $60,000 loan and, assuming you re-open your practice at the beginning of May, are forgiven for $40,000. That’s a guess. The text of the law is confusing, and I’ve seen multiple summaries that I couldn’t square with the law itself. The banks/SBA should issue guidelines in the next two weeks or so. This does look like a promising program – hopefully, we’ll have more clear answers soon.
Extended Sick Leave and Furloughed Employees
It turns out that there is no obligation to pay for additional sick leave for furloughed employees. Here are the helpful Department of Labor guidelines (see questions 26 and 27). So don’t officially lay off your staff to save on this extra sick leave requirement, which, incidentally, applies ONLY if they fall ill with COVID-19 specifically.
The longer-term challenge will be the childcare requirement when you do re-open. If the schools are still closed because of the pandemic, then the law stipulates that you pay employees 2/3 of their standard pay rate (up to $200/day) for up to 12 weeks if they need to stay home and provide child care. If you do have to pay, the money you put toward this extended sick/childcare leave will directly reduce your tax liability for 2020 – it’s basically a tax pre-payment that goes to your employee rather than the government. However, I don’t think this applies to businesses with fewer than 50 employees (ask your attorney).
We may need to be creative about this requirement. Some of you told me that you are considering turning your private offices into school rooms! We will see what we can do in the post-COVID world. But no matter what, try to work with your employees. If the employee feels like you’re on their side and are listening to their challenges, they will almost certainly be more willing to get creative in order to balance helping patients and taking care of their kids.
Also, as a reminder, check-in with your team during this time of uncertainty. You don’t need to provide a big update or have specific news to share. Just ask them how they’re doing. Staying connected when times are tough will go a long way towards building long term trust and loyalty.
That’s the update for this Tuesday morning. Please feel free to reach out if you have more questions. We’re in this together, and we will get through this challenging time.
Good health and best wishes to you and your families,
Trevor Kimball, PhD
President, Integrity Practice Sales
trevor@integritypracticesales.com