PPP eligibility?

[CaliBoneDoc]

I wanted to get forum opinions on eligibility for PPP money, given the nebulous language and terms of the program:

Background - I'm a single person S-corp, and expect a 20% decline in revenue this year, although the year to date collections have not yet reflected that decline (compared to the same period last year). If the decline is in fact 20%, I would still be able to pay myself the same W2 salary as last year, but would need to reduce or eliminate the pass through distributions. Depending on exactly how much revenue decreases, I may need to start using emergency fund money to meet monthly personal expenses.

Regarding the loan certification that "current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant", what is the consensus for MD's in the above situation? Thank you ..

[WCInovice]

Our group is struggling with this too.

We received funds from the PPP loan approval, but it's looking like as language becomes just slightly less murky, we're probably going to give it back.

We have 4 docs and three staff. The docs salaries will probably drop some, but will still be well over 200K (?some language in there about "rate of salary" around 200K/year). We didn't furlough any staff, so it's possible we could maybe use the money for support staff salaries for a 3-4 month period, but I think that's about it.

I'm just not sure you can use the money to keep an MD salary from say a 500K/year drop to a 400K/year due to lost revenue.

We're also still trying to figure out what to do with the CMS money as well.

[jacoavlu]

The key word is “support”. They could have used stronger language but they didn’t.

If they want to roll things back for situations like yours they could probably still do so by changing the forgiveness rules, writing in some phase out for salary above a certain number

but with regards to the loan I think you can take the language at face value, which means you’re eligible. After all, 20% decrease is just a guess right now isn’t it?

[formerly_cn]

In short: eligible.

Should you? Recently I made series of posts where i pointed out first hand knowledge of docs abusing this (as in 2-3 weeks of May be reduced pay and yet getting PPP). It literally says "impacted by". Vague. After thinking about it long and hard, many bigger businesses have gotten PPP without real clear need.

Yours is actually legit if you have 20% decline. Go for it. If you don't need later then return it in good faith. I personally it will be forgiven. So for sure apply.

However, if you are applying now you are probably out of luck. Many apps pending will exhaust the current round, practically speaking.

[CordMcNally]

Our group is struggling with this too.

We received funds from the PPP loan approval, but it's looking like as language becomes just slightly less murky, we're probably going to give it back.

We have 4 docs and three staff. The docs salaries will probably drop some, but will still be well over 200K (?some language in there about "rate of salary" around 200K/year). We didn't furlough any staff, so it's possible we could maybe use the money for support staff salaries for a 3-4 month period, but I think that's about it.

I'm just not sure you can use the money to keep an MD salary from say a 500K/year drop to a 400K/year due to lost revenue.

We're also still trying to figure out what to do with the CMS money as well.

It's probably worth it to see if you end up qualifying for any type of forgiveness. If not, then it basically becomes a 0.5% loan (unless they've changed that number recently).

Are you talking about the CMS money from the original CARES Act Provider Relief Fund that your practice got on either 4/10 or 4/17 based off your previous year Medicare revenue? If so, that's yours to keep. You have to sign the attestation but it's about as easy of free money as you can get.

[CaliBoneDoc]

After all, 20% decrease is just a guess right now isn’t it?

it is just a guess ... if by year end, I only find myself 5-10% down, would anyone be more concerned about taking the money?

[jacoavlu]

“Would anyone?”

yes of course, you are asking for opinions and you will find them on both sides. Who really cares?

5%, 20%, 50%. You don’t get to wait and then decide.

It may be already be too late, right now. Make your decision and act.

[docnews]

I agonized over this as well. I don't think our government should setup an underfunded program with vague restrictions. I don't think Shake Shack et al should be thrown under the bus since the government made the rules and they were followed. I applied as a sole proprietorship when my main contract cut hours and is floating the idea of rolling furloughs. I don't know my personal impact but I think it is likely to be >$20k which is what my loan was capped at. I will follow the rules. If they want to change them I will gladly return money if others are required to do as well so that my kids don't have to pay for more later.

[childay]

Apply for it and then await further guidance re: forgiveness. Worst case you just got a better loan rate than you can get anywhere else

[WCInovice]

It's probably worth it to see if you end up qualifying for any type of forgiveness. If not, then it basically becomes a 0.5% loan (unless they've changed that number recently).

Are you talking about the CMS money from the original CARES Act Provider Relief Fund that your practice got on either 4/10 or 4/17 based off your previous year Medicare revenue? If so, that's yours to keep. You have to sign the attestation but it's about as easy of free money as you can get.

Yes, talking about the 4/10 cares money.

Within that attestation it’s not as simple as if you were impacted by the pandemic. It also talks about how you had to spend money preparing for it or something like that.

I see a lot of people saying “free money” but I’ve also seen health care attorneys saying to pump the brakes.

[CordMcNally]

Yes, talking about the 4/10 cares money.

Within that attestation it’s not as simple as if you were impacted by the pandemic. It also talks about how you had to spend money preparing for it or something like that.

I see a lot of people saying “free money” but I’ve also seen health care attorneys saying to pump the brakes.

Have you reduced hours/patient interactions either directly or indirectly? I feel like that would be pretty easy to say you were during your part to reduce or prevent the impact of COVID-19. If you're concerned about it then put the money in an interest bearing account.

[Molar Mechanic]

If you haven't applied, you are very likely too late. We got in on round one, but just barely. Our practice dropped about 90% for the last weeks in March, and April will be down 40%. Could I survive without the loan? Yes, I make good money and save and plan well. Will it make it easier to bring our full staff back sooner, even when revenues are slow to grow back to 100%? Yes. The loan doesn't specify that you are going to go out of business without it, just that you are suffering a financial hardship. The goal is that you keep people employed, including yourself.

There is no cap on annual salary, but the amount of salary you can qualify for and potentially be forgiven is limited to ~$15,300 over an 8 week period (prorated from $100k per year [$100k/52*8]), plus any retirement contributions for the year prorated over that same time period, rent, and health insurance benefits.

The law was poorly written, and that led to a s#its#ow of a rollout of the plan and a month later we still don't have good guidance for what the actual rules of the loan are. There is no chance to even consider forgiveness until July, as the forgiveness depends on staffing on June 30th. Honestly the companies that will benefit most from the forgiveness are those that will least need it, as you have to have a robust payroll to get anything forgiven. If your employees are at home, and your 8 week clock starts when you get the funds, then the people most affected will get the loan, but little forgiveness.

[jacoavlu]

^^^ little forgiveness if you’re not paying employees, yes. But that’s the point of the loan. “Paycheck protection program”. If people aren’t getting paychecks, then the business shouldn’t apply for the loan.

[Molar Mechanic]

^^^ little forgiveness if you’re not paying employees, yes. But that’s the point of the loan. “Paycheck protection program”. If people aren’t getting paychecks, then the business shouldn’t apply for the loan.

Except that if you wait to apply, there is no money left. Then you’re double fricked.

[jacoavlu]

Except that if you wait to apply, there is no money left. Then you’re double fricked.

Agree. See post #7 of this thread