The Small Business Administration is offering a Paycheck Protection Program to help Practices pay Employees and Keep their Office open.
For physician practices with fewer than 500 employees, the Small Business Administration (SBA) offers access to a potentially forgivable loan through a new $349 billion program called the Paycheck Protection Program (PPP).
Specifically created to help small businesses keep their workforce employed, the program is open to any business with less than 500 employees. Furthermore, with SBA guidance, the loan terms under the program will be the same for all borrowers as follows:
- Loans can be for a total amount equal to up to 2.5 times a borrower’s average monthly payroll costs from 2019. That total amount is subject to a $10 million cap and payroll costs will be capped at $100,000 annualized for each employee.
- Loan proceeds can only be used for: payroll costs and benefits; interest on mortgage obligations, incurred before February 15, 2020; rent, under lease agreements in force before February 15, 2020; and utilities, for which service began before February 15, 2020.
- A loan will be 100% fully forgiven if: (1) the funds are used for payroll costs, mortgage interest, rent, and utilities over the eight-week period after the loan is made (but not more than 25% of the forgiven amount can be used for non-payroll costs) and (2) employee and compensation levels are maintained.
- This loan has a maturity of 2 years and an interest rate of 1%. All loan payments will be deferred for six months. Additionally, no collateral or personal guarantees are required, and neither the government nor lenders can charge small businesses any fees.
Practices should consult with their accountants and financial advisers for the details.
Applicants will need to complete the Paycheck Protection Program loan application available at www.sba.gov, and submit it with the required documentation to an approved SBA lender that can process their application. Loans will be available through June 30, 2020 and are considered on a first-come-first-served basis, so program funding is limited.
For further details on the Paycheck Protection Program, click here.