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No PPP Loan Yet? Here’s Your Golden Second Opportunity!

August 2020
Practice Management Financing
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July 7, 2020

In a surprise move, Congress voted to extend the Paycheck Protection Program (PPP) for five additional weeks and President Trump signed the bill into law on July 4, 2020. The new law allows dental practices and other small businesses until August 8 to apply for the approximately $129 billion in PPP funding remaining.

The PPP was launched in early April as the COVID-19 pandemic battered the U.S. economy and forced most dental practices to close. The program provides forgivable loans practices can use to cover payroll and selected other overhead costs.

The new law follows closely on the heels of the Paycheck Protection Program Flexibility Act (PPPFA) enacted in June, which provided favorable changes allowing most doctors to achieve 100% loan forgiveness, provided they properly account for and document their PPP expenditures. Under the PPPFA, the percentage of the loan proceeds that must be spent on payroll costs was reduced from 75% to 60%, thus increasing the amount available to be spent on rent, utilities, and mortgage interest from 25% to 40%. More importantly, the law allows you to elect to triple the time you have to spend the PPP funds from 8 weeks to 24 weeks. This time period is not automatic, so you must make sure you elect to use the 24-week period when you file your application for PPP loan forgiveness.

Doctors who haven't yet applied for PPP funding should do so now, in order to receive loans that can be forgiven tax-free. With more time to apply, and an easier road to 100% loan forgiveness, this represents a slam dunk opportunity to help recover from the financial hit caused by the COVID-19 related closing and the increased operating costs and reduced productivity upon reopening.

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