Practically every industry has felt the impact of COVID-19, but perhaps none more than independent practices. With dentists, eye doctors, dermatologists, and more deemed nonessential (except for emergencies), physicians are struggling to keep their businesses afloat. And with no money coming in the door, many practices can't afford to pay their employees a full salary (or a salary at all, for that matter). Never has financial assistance been more needed.
For example, take a look at the dental industry. A recent survey of 19,000 dentists reveals that 76 percent of practices closed except for medical emergencies, and nearly 20 percent closed completely. Unfortunately, 73 percent of practices reported compensating staff with partial pay or no pay at all. Things aren't looking good for dental practices, and the COVID-19 crisis is similarly impacting other sectors across the country.
Independent practices can't keep functioning like this for long before going under entirely. There are bills to pay, mortgages to make, loans to repay, payroll to maintain—without money coming in the door, these businesses are in big trouble.
Fortunately, there's a solution. Now, there are plenty of COVID-19 financial assistance options available for practices, and these resources are game-changers for businesses in need. Affordable small business loans, fast grants, and debt forgiveness are just a few of the ways the federal government, state and local governments, and other private companies are providing financial lifelines to independent practices.
Below we're covering all the financial resources at your practice's disposal to survive and thrive during the COVID-19 pandemic.
COVID-19 Financial Government Assistance
Federal, state, and local governments are all providing varying financial assistance to help small businesses stay afloat. If you're looking to score reliable financing (with favorable rates and terms), look here first.
The federal government is notorious for lengthy processes and mountains of paperwork, but they've shifted into high gear with the passing of the $2 trillion coronavirus stimulus plan (CARES Act). Here's what the program includes:
SBA Economic Injury Disaster Loans (EIDL)
These SBA EIDL loans provide businesses with up to $2 million in working capital to cover day-to-day expenses and payroll.
Emergency Economic Injury Grant (EEIG)
If you've applied for an EIDL, you can get a $10,000 advance within three days while you wait for approval and processing. Any cash from the advance used on payroll converts into a grant, which means you won't have to repay it.
SBA Paycheck Protection Program (PPP)
The PPP provides businesses with loans of up to $10 million to help maintain payroll and survive the COVID-19 crisis. Your loan amount will be equal to 250% (or 2.5 times) your average monthly payroll. Payments are deferred for six months, and portions of the loan used on payroll, mortgage interest, rent, and utilities may be forgiven entirely.
Local and State Assistance
State and local governments are providing everything from microloans to grants to no-interest loans to businesses and practices impacted by the coronavirus. Here are a few examples of the fantastic financing they're offering:
- Denver plans to provide microloans between $5,000 and $50,000 to businesses impacted by COVID-19.
- Connecticut is providing 0 percent one-year bridge loans up to $75,000 to small businesses harmed by COVID-19 that can prove they were profitable before the crisis.
- New York City is offering small businesses (with fewer than five employees) grants up to $27,500 to cover 40 percent of payroll costs for two months to help maintain workers.
There are far too many state and local financial resources available to mention them all here (isn't that great?!).
For an up-to-date list of financial assistance programs near you, check out this state-by-state list.
Beyond direct financial aid, governments and associations are providing other special programs to assist practices:
- The Centers for Medicare & Medicaid Services (CMS) is lessening the financial burden on practices by expanding its accelerated and advance payment program to all Medicare providers and suppliers throughout the country. This program is intended to help relieve cash flow problems many practices are currently facing. As a physician, you can request up to 100% of the Medicare payment amount for a previous three-month period. You will have 210 days to pay back this advance. And with a streamlined approach, the processing times average between just four to six days (down from three or four weeks).
- The Medicare sequester will be temporarily suspended from May 1 to December 31.
- The CMS is also lifting Medicare restrictions on the use of telehealth services during the COVID-19 emergency.
- The CARES Act provides small business tax provisions like employee retention credits, deferred payroll tax payments, modified limitations on Charitable Contributions, and more.
- Some states have banned evictions to give practices more time to get the money they need to pay rent and mortgages. These state governments are also urging banks to provide zero-interest emergency unsecured loans and grants to small businesses to help with rent.
- Licensing applications and renewals are being waived in states to expedite the qualification process to get more professionals helping with the disaster.
COVID-19 Financial Private Assistance
The big companies are helping the little ones with everything from marketing credits to loans to grants. Tech companies, banks, and other associations are uniting to give the underdog the help they need:
Amazon Neighborhood Small Business Relief Fund
Amazon is providing grants to small businesses in specific Seattle neighborhoods that have been hit hard by COVID-19, focusing more so on businesses that depend on foot traffic. Visit this page to apply.
Facebook Small Business Grants Program
Facebook announced $100 million in grants to up to 30,000 businesses. Facebook grants will take the form of Facebook ad credits and cash. To learn more and apply, visit Facebook's application page.
The GoFundMe.org Small Business Relief Fund
GoFundMe's Small Business Relief Fund will provide one-time matching grants to businesses that raise at least $500 in donations on the platform (until the fund is depleted). These grants are to be used for payroll and other ongoing expense obligations.
Kiva expanded its lending program in the US to support more small businesses impacted by the coronavirus. Kiva provides zero-interest loans up to $15,000 with generous 6-month grace periods.
MainVest Zero-Interest Loan
MainVest launched its Main Street Initiative to grant $2,000 zero-interest loans to any existing brick and mortar business financially hurt by the coronavirus crisis.
Bank Payment Deferral Programs
Banks and financial companies announced that they're going to work with customers impacted by COVID-19 through programs like fee waivers and payment deferrals. To see if (and what) your bank is offering, check out CNBC's roundup list here.
Get the Financial Help Your Practice Needs
It takes a little cash to make big things happen, so don't hesitate to get the financing your practice needs. Even if you don't quite need financial assistance yet, it's not a bad idea to go ahead and apply for these programs. For example, the EIDL program will take close to a month from application to funding, so it's best to get started as soon as possible, especially since there's no application fee or rejection upon acceptance penalties.
America needs practices like yours now and in the future. While your services might be deemed nonessential during a pandemic, they're indispensable when we return to post-COVID-19 (i.e., normal) life. Get the capital you need to survive now and thrive later.
If you would like more information on preparing your practice to thrive after the COVID-19 crisis, join us in our Practice Comeback Plan Weekly Webinar Series.