The American Dental Association (ADA) made an important announcement on March 31st, 2020 regarding the Economic Injury Disaster Loans (EIDL) that are available through the Small Business Association (SBA). If you applied for this loan before March 29th, the ADA is recommending that you reapply using the new form.
This new form is streamlined as it requires less documentation than the previous Economic Injury Disaster Loan applications.
Now you have the option to “check a box” to request an emergency grant of up to $10,000, which the SBA must provide within three business days of the grant’s request. This change is as a result of the COVID-19 pandemic and offers business owners(including Dental), sole proprietors and independent contractors an opportunity to receive funds quickly.
It’s worth mentioning that “This grant will not have to be repaid even if you are not approved for the loan,” according to the new fact sheet created by the ADA and Academy of Dental CPAs. There is also opportunity to get your loan forgiven.
The Cares Act (signed into law on 3/27/20) impacts both the Economic Injury Disaster Loan and the Payment Protection Loan. You can apply for both but it’s recommended you apply to the EIDL prior to the Payment Protection Loan if you wish to participate in both programs. Also the ADCPA recommends you consult with your tax advisor on best path forward for loan utilization.
Some of the highlights of the Payment Protection Loan include a 1% interest rate and even loan forgiveness. Funds would be made available up to 2.5x your monthly payroll costs(wages, health insurance, PTO, retirement benefits and state and local payroll taxes assessed on compensation of employees), not to include federal payroll taxes.
Eligible amounts for loan forgiveness include the payroll costs, mortgage interest, rent and certain utility payments in the 8-week period following funding. An important requirement for loan forgiveness is contingent on having 75% of the number of employees on payroll Feb 15, 2020 to June 30, 2020.
We recommend you read through the entire Fact Sheet provided by the ADA and ADCPA for more detail.
The SBA COVID-19 Economic Injury Disaster Loan form can be accessed here.
If you’re also concerned about your employees here is a breakdown of benefits they can receive.
***Please note this was post written for informational purposes only and should not be construed as financial advice. We recommend you consult with a tax advisor or CPA.***
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