Take Action on the Paycheck Protection Program
On April 16th, 2020 the Small Business Administration announced that the $350B allocated for the Paycheck Protection Program (PPP) loans have been depleted. This comes after the Economic Injury Disaster Loan (EIDL) program stopped accepting new applications as well.
Sources report that Congress is expected to replenish the funds to allow for more PPP loans. Lawmakers are facing substantial pressure to add more funding to the program next week.
The full $350B was depleted within two short weeks since the $2T stimulus bill was announced. This should serve as a call to action for any small businesses who have delayed in taking action on the PPP. If the funds are hopefully and likely replenished, they will only be available for a short amount of time before once again depleted. You can learn more about the PPP here, in a guide which details the loan eligibility and potential forgiveness up to the loan amount, for payroll and overhead costs (rent, utilities, interest). A business is likely eligible if it has 500 or fewer employees, a tangible net worth below $15M, and an annual net income below $5M. The loan application form can be found here.
Many practices, billing companies, and other small businesses are facing hardship due to greatly reduced patient volumes, especially for elective procedures. In a survey conducted by the MGMA, the majority of responding practices reported a decrease in revenues and patient volumes, with nearly all responding practices reporting some form of direct or indirect impact resulting from COVID-19. The MGMA is calling for further stimulus and action to provide specific relief to independent practices. Some states such as Texas are now planning to loosen restrictions on surgeries, which should serve to provide some relief for surgeons who are among the most impacted by stay at home orders. Experts continue to caution against relaxing restrictions too quickly, but surgeries performed in sterile and controlled conditions may see a more expedited return than other services and industries.
There is clearly limited funding available through the PPP program. Further, the PPP loans will not provide financing to support compensation of individuals with annual earnings exceeding $100k. This means that many physicians’ personal income will not be supported through this program. For these reasons, practices should still seek to enable their earning power and ability to practice medicine remotely. Practices should seek to leverage technologies to supplement and sustain their revenues. We have worked hard to make such technologies and solutions available to you, and you can read more about them here: Telehealth, Practice Support, and Hosted solutions. If there are any other ways that we can help enable your practice and help you sustain your revenues, we encourage you to let us know at [email protected]
– Ben Scharfe, Amazing Charts
Ben Scharfe is a CPA, CA who has been with Harris Healthcare for over five years and is currently a member of the Amazing Charts leadership team.
For more information and resources for handling the COVID-19 crisis, visit our dedicated COVID-19 page here.