Hope you and your families are doing well. Earlier this month the Senate passed H.R. 7010 to modify specific provisions related to the PPP Loan forgiveness. As expected the President signed it into law This is great news and honestly should have been done months ago!
The changes will most likely allow dental practices to get most if not all of their loans forgiven. It is a huge win because it allows dental offices to slowing bring on staff to match production instead of trying to hire people for the sake of getting the loan forgiven.
Below are some of the key changes:
- The previous 8 week period to spend the funds is now 24 weeks or 6 months
- Previously 75% of the loan needed to be used for payroll, now just 60% of the loan needs to be used for payroll, the remaining amount can be used for rent and utilities
- Workforce reduction date of June 30th is now Dec 31 2020
- Possible exception if the employer tried to rehire qualified employees but could not find them.
- Repayment of the non forgivable portion of the loan- if any remains is extended from 2 years to 5 years.
What we will Virjee Consulting be doing with these changes?
- Our expectation is that most practices will qualify for the full forgiveness over 6 months due to the changes
- We will review our forecast previously created for you and notify of adjustments we need to make based on these new changes.
- We expect these changes will have a different impact on our Independent Contractor clients operating as an S Corp. We will review and reach out with new game plans.
- Once the law is finalized and the banks have updated their forgiveness application process we will reach out to you regarding the forgiveness process.
What should you be doing?
Talk to your CPA to see what strategy they have in place to ensure the funds are used in the best way possible to help your dental office reopen successfully.
Here’s to your best financial future ever!