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.
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