On April 8, 2020, CAP held a webinar on financial relief available to medical practices. The webcast recording, slides, and handouts are now available. Click here to view the webcast on-demand, and click the Resources tab to access the slides and handouts.
As a result of COVID-19, physicians may be interested in federal relief opportunities to provide emergency funds for their practices. The Paycheck Protection Program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.
While the Paycheck Protection Program is currently on hold, CAP will be updating its members on any further developments.
Funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
Must Keep Employees on the Payroll—or Rehire Quickly
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
All Small Businesses Eligible
Small businesses with 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors—are eligible. Businesses with more than 500 employees are eligible in certain industries.
When to Apply
We encourage you to apply as quickly as you can because there is a funding cap.
How to Apply
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. All loans will have the same terms regardless of lender or borrower. A list of participating lenders as well as additional information and full terms can be found at www.sba.gov.
The Paycheck Protection Program is implemented by the Small Business Administration with support from the Department of the Treasury. Lenders should also visit www.sba.gov or www.coronavirus.gov for more information.
Paycheck Protection Program Resources
California State Resources
As of April 3, 2020, California small businesses impacted by the COVID-19 crisis can apply for a loan from the federal government for up to $10 million. Importantly, the program is first-come, first-serve and the Governor encourages all eligible California small businesses to contact their lender to learn more.
Today, the Governor also announced that the state is allocating $50 million to the California Infrastructure and Economic Development Bank for loan guarantees to small businesses to help eliminate barriers to capital for individuals who do not qualify for federal funds. The state is also allowing small businesses to defer payment of sales and use taxes of up to $50,000, for up to 12 months.
Financial Resources for California Small Businesses- https://covid19.ca.gov/business-and-employers/
California Disaster Relief Loan Guarantee Program — COVID-19 (via the state’s ibank) https://www.ibank.ca.gov/small-business-finance-center/