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No New SBA Guidance: What To Do Now?
Use Our Tools As You Design a Plan for Success
No New SBA Guidance on Spending For Loan Forgiveness
The SBA remained focused on new PPP loans early this week, only releasing new guidance last night on how to calculate the loan maximum for the application for seasonal employers. 
When is SBA Guidance Expected? A new deadline has not been released. Secretary Mnuchin spoke this yesterday but focused on new funding issues and adding audits for companies who receive more than $2M in funding.

Over the last month, the SBA has been releasing information in the form of Q&A guidance related to PPP maximum loan calculations a few times a week. While it is not known when guidance will be released related to spending the EIDL & PPP funds, we will let you know the facts as soon as we have them.
Status of New PPP Funding?
The SBA website crashed multiple times early this week as banks tried to upload applications. The software glitches make it difficult to predict how quickly the funds will be exhausted; however, many bankers believe the money will run out by the end of the week.

Most banks stopped accepting applications by midday Monday as they already had too many applications in their pipeline from the last funding to be able to accept more now.
 
In reality, closer to $1 trillion is needed to meet the demand for PPP loans so it is expected that many businesses will not receive financing this week.

The SBA funded only $28B in loans last year and the system isn't designed to accept this volume of applications, particularly in a short period of time.
Should You Spend Loan Money Now?
This depends on when you received the funds. At this time, the regulations still provide you need to spend the money within 8 weeks from the time of disbursement.  In most calculations, you have a 2-week window from the time you receive the funds until you need to start using the funds in order to meet the current requirements on fully spending in 8 weeks.
Each Practice should base spending decisions on what makes the most sense for their practice

  • You are not yet required to rehire your team immediately when you receive the funds (based on our understanding of current regulations)

  • If you want full forgiveness on the funds, you need to start planning as soon as you receive the funds (or before) so you know when is the best time to start paying your team (either gradually or full pay from the start).

  • If you are not planning to reopen in the next 2 weeks, you may consider leaving your team on unemployment at this time and conserve the PPP funds until you are closer to your opening date. We would recommend using our PPP Tracker to enter your estimated payroll costs over the 8 weeks to determine how long you could wait to start paying your team (see below). 

  • Please note, if you received PPP funds more than 2 weeks ago, you may have to start paying your team now (even if you are not opened), if you want full forgiveness.

  • If you plan to reopen in the next 2 weeks, you may choose to bring your team back now and start paying from the PPP funds. This would allow you time to get your office ready to reopen with the new recommendations from the ADA & CDC.  In addition, this could create goodwill with your team if they have not received unemployment benefits yet (many unemployment systems are backlogged).

  • You may choose to start paying your rent, utilities and mortgage interest immediately from the PPP funds

  • Please note, there is momentum for the "choose your 8 weeks" concept which has been grown. While we still believe this has a low probability of being allowed, IF it is permitted, we believe it would start when you started using the money. We really don’t know at this time. Our concern, is if you wait too long for the final SBA regulations, depending on when you received the money, you may not be able to use it all within the 8 weeks starting at disbursement. 
Employee Reinstatement & FAQ?
The re-employment process is proving to be very challenging for many because of all of its moving parts. A few very common questions are “What paperwork is required to reinstate my team?” and “What if my employee doesn't want to come back?"
To assist you with this challenge, Bent Ericksen & Associates (Dental HR Company) has created a Reinstatement Guide. It walks you through the entire process of reinstating employees and handling objections. Click here to visit their webpage. https://bentericksen.com/reinstatement-guide/  
Compliant Policies to Limit Practice Liability
With the COVID-19 pandemic, elevated safety standards established by CDC, OSHA and other agencies must be satisfied to ensure protection of staff and patients. Practices should be aware of federal and state requirements with which compliance is required. Click HERE to read an article provided by a law firm. 

ADA & State Reopening Recommendations
The ADA has provided an Interim return to work toolkit on their website. Click Return to Work Interim Guidance Toolkit to review.  Please visit your state dental website for individual state guidance.
Have You Considered Membership Plans?
If you are not yet using a Membership Plan for your patients or need to redesign the one you have, I recommend considering this as a way to increase revenue in your practice.

Two companies that continue to rise to the top are Kleer and Boom Cloud and there are many others. Now is an excellent time to attend some of their webinars and learn how you can use this as a tool to combat patients having lost their insurance during closure and/or not having as much money to pay for procedures they need.
Have More Questions? Answers to Most Common Ones:

How Do I Decide What Expenses to Pay in Each Week? You may use our planning guide by clicking HERE to download it. ( Sent 2 weeks ago)

What May I Spend EIDL $$ on vs. PPP Money? You may use our expense eligibility guide by clicking HERE to download it. ( Sent 2 weeks ago)

How do I plan for the usage of PPP Money?  We suggest you enter your estimated approved expenses in our PPP tracker. This will provide you details on how much of the money could be forgiven and when you need to start paying your team. (See next question for the link to our tracker).

How May I Track Loan Forgiveness? You may use our expense tracking guide by clicking HERE to download it. (Notes are edited in this version )

May I pay team members a bonus? Yes, you can pay the team a bonus; however, it is unclear how large it can be. The CARES Act says the pay needs to be incurred in the 8 weeks so we would assume for now that the bonus should be less than 25% of their pay.

May I hire new team members?  Yes, that is allowed.

May I receive partial PPP loan forgiveness?  Yes, you can. The forgiveness floor is that 75% of the funds must be used on payroll related expenses. Under the current guidelines, the amount of forgiveness you receive is reduced in proportion to two factors:
  • The percentage of team members you rehired by the end of the sooner of 8 weeks from date of funding or June 30th. For example, if you had a 15% drop in full time rehires, then your loan forgiveness amount is reduced by 15%.
  • The percentage of reduction in pay to the team members. Any reduction in pay greater than 25% of what they were paid in the previous Quarter reduces the forgiveness by the same percentage.

What is maximum I may pay Doctors earning over $100K/yr?   Note that 8 weeks is only 56 days and not two full months. While the SBA allowed you to use $8,333 per month for the maximum loan calculation, the allowable forgivable expense comes out to $15,384.61 for the 8-week period.

May I pay Doctors more than $15,384.61 for the 8-week period?   Yes, you may pay the Doctors more; however, the extra pay needs to come out of other business funds and not the PPP loan. We recommend using our spreadsheet to calculate the exact amount of pay that will be forgiven by the PPP and transfer that amount into your payroll checking account from which payroll will be drawn. Then, the additional pay for the Doctors will come out of your other business funds.

When does unemployment end?   In general, you and your team will stop receiving unemployment once you rehire your team, meaning it will be the sooner of when they start working or you start paying them. More specifically, each State varies as to whether it allows partial unemployment and many States require you to report the hours someone worked in the prior week, not what they were paid. The DOL is on the lookout for unemployment fraud so please make sure you follow your State’s rules.

COLEMAN, UREDA, ALFORD & KAUCHER PA

Every effort is made to provide accurate and complete information in Coleman, Ureda, Alford & Kaucher, PA publications. This information is being provided as a courtesy to our clients and is based on the best of our knowledge at the time. Please understand the coronavirus situation and related bills are an ever evolving situation. The bills are being interpreted and adjusted by various agencies on a frequent basis. Thus, we cannot guarantee that this information remains up-to-date.