Economic Stimulus for Doctors

“Does my medical practice or medical spa qualify for the CARES Act / Economic Stimulus?”

The short answer is YES.  The Coronavirus Aid, Relief and Economic Security (CARES) Act is the stimulus bill recently passed by the US government to help provide relief options for small businesses including doctors offices, medical spas and aesthetics clinics during the COVID-19 national emergency.. 

The Coronavirus Aid, Relief and Economic Security (CARES) Act provides $349 billion in funding to through the Small Business Administration (SBA) that will provide small businesses, including physician offices & medical spas with a forgivable loan of up to $10 million. Practices can apply for as much as 250% of their average payroll costs over the previous 12 months.  Loans through this program can be used to cover payroll, insurance premiums and mortgage, rent and utility payments and other qualifying expenses.

How do I know if my office is eligible?

The program is open to small businesses, including physician practices, 501(c)(3) nonprofits, 501(c)(19) veteran’s organizations, tribal business, sole-proprietors, independent contractors and other self-employed individuals, as long has you have under 500 employees.

How do I apply for the stimulus loan?

The loans will be made available through SBA-certified lenders or lenders approved by the United States Treasury Department.  You do not apply directly with the SBA, you must go through a lender such as a bank.   If your current bank is an SBA-certified lender, contact the lender at your bank immediately to apply. If your bank is not an approved SBA lender, you can use the SBA lender match tool to identify a lender in your area.  

What is the timeline for applying?

The CARES Act requires the Small Business Administration to issue regulations within 15 days of enactment, so expect details to come out by the week of April 6, 2020.  You can contact your lender now to get in "line" to be one of the first to apply.  We will update this blog as further details of the loan application process is released by the SBA.  You must apply for the loan before June 30, 2020.

What can I use the loan money for?

Payroll costs • Health care benefits (including paid sick or medical leave, and insurance premiums) • Mortgage interest obligations • Rent obligations • Utility payments • Interest on other debt obligations incurred previous to Feb. 15, 2020

What are the terms of the loan?

The loan period is retroactive to February 15, 2020, through June 30, 2020 and you had to be in business by Were in business on Feb. 15, 2020.  The maximum loan amount is $10 million. Medical Practices and Medical Spas can apply for as much as 250% of their average payroll costs over the previous 12 months. Employee salaries of over $100,000 are not counted in this determination, and loan funds cannot be used to pay salaries over $100,000.  No collateral or personal guarantee are required by the borrower.

Borrowers must qualify for the loan by meeting the following requirements.

• Good faith certification that the loan is necessary because of economic uncertainty caused by COVID-19 and will be applied to maintain payroll and make required payments.
• Borrower must also certify that they are not receiving this assistance and duplicative funds for the same uses from another SBA program

What are the terms of the loan forgiveness? 

Loan recipients will be eligible for loan forgiveness for an 8-week period after the loan’s origination date in the amount equal to the sum of the following costs incurred during that period.   

• Payroll costs (compensation above $100,000 excluded)
• Payment of interest on mortgage obligation
• Rent obligations
• Utility payments

To receive forgiveness, medical practices and medical spas will need to meet employee retention and compensation requirements and submit proof of the above payments made during the 8 week period.

Loan Forgiveness If Employees Are Rehired

There is flexibility in the program to allow medical practices or medical spas to hire new employees or re-hire old employees by June 30 and still qualify under the head count requirements for the loan forgiveness.

Ongoing Loans Not Forgiven

Any loan amounts not forgiven at the end of one year are carried forward as an ongoing loan with terms of a maximum of 10 years, at a maximum 4% interest rate. The 100% loan guarantee remains in place.

Lenders will be reimbursed by the US Government based on the balance of the financing outstanding at the time of loan disbursement.

Further Resources

Schedule a free strategy call with Medical Marketing Whiz to discuss a marketing strategy for COVID-19 and get a marketing analysis for your practice.  You can schedule you call here:  http://bit.ly/MMWmarketingcall

Paycheck-Protection-Program-Overview

Payment Protection Program Frequently Asked Questions. U.S. Senate Committee on Business and Entrepreneurship.

Small Business Owners Guide to the CARE Act - U.S. Senate Committee on Business and Entrepreneurship.