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COVID-19
PANDEMIC

ECONOMIC INJURY DISASTER LOANS
The SBA’s Economic Injury Disaster Loan (EIDL) and Bridge cepting) a PPP loan. This credit applies to qualified employers that
Loan programs are intended to provide access to additional capital saw a decrease of gross receipts of at least 50 percent compared to
through low-interest loans. Proceeds received from an EIDL loan, the same quarter in 2019 or had to fully or partially suspend oper-
unlike those of the PPP loan, may be used for most normal oper- ations due to a government order related to COVID-19.
ating expenses. Businesses can borrow up to $2 million (reduced by This 50-percent credit of up to $5,000 per employee is available
any outstanding bridge loans – discussed next) at an interest rate of to cover eligible wages paid through the end of the year. Determi-
3.75 percent. nation of an eligible employer is done on a calendar-year, quarterly
The loan can also have a term up to 30 years, although terms are basis. Claim the payroll tax credits by either reducing the current
determined case by case. It should also be noted that businesses payroll tax deposit or filing for an advance payment of the credit.
with credit available elsewhere are not eligible for EIDL loans. If your business received a PPP loan, it is not eligible to take the
As part of the EIDL, a business can separately apply for a ERC.
$10,000 loan advance. This grant does not have to be paid back re- A business cannot use the same wages to claim both the FFCRA
gardless of whether the EIDL loan is approved. As of this writing, credits and ERC. Also, you cannot claim any FFCRA credits on
the SBA is processing agricultural business applications, only. It is amounts that are forgiven under the PPP loan provisions.
unclear when the SBA will resume processing EIDL applications
for other impacted businesses but it is expected that they will do so.
This crisis has made it even more
BRIDGE LOANS
important to run your medical practice
SBA Express Bridge Loans can be beneficial for emergency cash
as efficiently as possible. That includes:
needs while applying for an EIDL loan. A business can borrow up
to $25,000 at an interest rate not to exceed 6.5 percentage points
• Employing the best staff and paying them
over the prime rate, over a seven-year term. Only SBA Express
accordingly,
lenders may process these loan applications. This loan is meant to
be a short-term source of funds while a business formerly applies • Discussing morale with your staff and asking them
for the EIDL loan. for their opinions on how to make the office a better
Many other types of SBA loans are also available. While many and more efficient place to work,
businesses prefer other lenders because of the SBA’s extensive doc-
• Clearly communicating with your team about your
umentation requirements, all funding avenues should be explored
plans for handling the crisis,
in times like these.
• Reviewing financial statements and other financial
FFCRA AND CARES ACT data frequently,
Businesses should also carefully consider the potential cash liq- • Cleaning up patient receivables, and
uidity generated by the payroll tax credits provided by the Families
• Continuing to negotiate for discounts and deferrals of
First Coronavirus Response Act (FFCRA) and the Coronavirus Aid,
payments to vendors and landlords.
Relief, and Economic Security Act (CARES).
The FFCRA expanded mandatory paid sick and family leave to
employers with fewer than 500 but more than 50 employees. There Most importantly, show your staff that you are
also appears to be an exemption for healthcare providers regardless involved in the management/business of your
of the number of employees. However, there is some concern re- practice, not just in being a great physician.
garding this point.
Wages paid from April 1, 2020 through December 31, 2020 under
qualified sick or family leave provisions are eligible for a dollar-for- Jim Rice and Christopher Davis are CPAs and shareholders at Sol Schwartz
dollar, refundable credit up to the limitations outlined by the law. & Associates and lead the firm’s healthcare practice. The firm is observing its
Your business may also qualify for the new employee retention 40th anniversary this year and is a proud Gold Level Sponsor of the Bexar
tax credit (ERC) if it was unable to secure (or decided against ac- County Medical Society’s Circle of Friends.

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