The CARES Act (H.R. 748) was signed into law by President Trump just hours ago. Much of the contents of the bill have been public information for days and have been blowing up every dental-related Facebook group in America. You can read the full contents of the bill (here); we have read almost every word that applies to you, with particular focus on the new SBA loans and the promise of free money.
Emergency EIDL Grants (Section 1110)
The rumors are true. Through an SBA loan, you can be granted up to $10,000.00 if the money is used for staff costs, rent, business debt payments, or other business expenses that you can’t pay because of revenue loss. We give detailed instructions on how to apply for this loan here: https://practicefinancialgroup.com/apply-sba-economic-injury-disaster-loan-eidl/
Here are some important things to glean from this provision of the bill:
- Eligibility; check, you’re eligible (less than 500 employees)
- Emergency Grant
- This is requested as an “advance…not more than $10,000.
- Use of funds:
- Providing sick leave to employees unable to work due to COVID-19 (not applicable if your office is shut down)
- Maintaining payroll to retain employees during business disruptions or substantial slowdowns (not applicable – you’re not paying your employees)
- Making rent or mortgage payments (mortgage = loan on the building, practice purchase note or equipment note)
- Repaying obligations that cannot be met due to revenue loss
- Repayment – you’re not required to repay up to $10,000.
Is there a “first come first serve” order on this? Yes. The SBA was granted $10,000,000,000 to carry this out. They will dole this out until it is gone.
SBA 7(a) Relief Loans
These loans will be administered by private banks, authorized to approve SBA loans. Although the legislation is out, we do not recommend taking action on this loan yet. The terms of this loan apply for all of 2020, and unlike the EIDL loan, there is no first-come-first-serve basis (no rush). We will provide more guidance on these loans in the coming days.
Remember, other than the $10,000 mentioned above, and the few possible provisions of loan forgiveness in the 7(a) loan (the legislation is out; we have read it word for word, but are waiting for further interpretation as the law gets applied), these are loans. And almost never do we recommend that you hastily run out and borrow money. Again, we recommend putting a hold on this one.
PFG Advisory Team