With the passing of the CARES Act on March 27, AAOMS is carefully reviewing what this means for oral and maxillofacial surgeons and their practices.
AAOMS recommends you immediately review the disaster assistance opportunities available through the Small Business Administration (SBA). Discuss your options with your practice accountant, financial advisors and/or attorneys.
Two notable loan programs include:
- Economic Injury Disaster Loan (EIDL) Program – Section 7(b) of the SBA (apply immediately)
AAOMS strongly encourages you to complete the COVID-19 Economic Injury Disaster Loan Application, which the SBA estimates will take about two hours to complete. The EIDL program provides small businesses with working capital loans of up to $2 million.
You may request an immediate emergency grant through this loan program of up to $10,000, which the SBA must provide you within three days of your request. Applicants will not be required to repay advance payments, even if subsequently denied for an EIDL loan. Advance payments may be used for providing paid sick leave to employees, maintaining payroll, meeting increased costs to obtain materials, making rent or mortgage payments, and repaying obligations that cannot be met due to revenue losses. The SBA has set aside $10 billion for the EIDL program, and the grants are to be given out on a first-come, first-served basis.
The terms for these loans are 3.75 percent interest rate, up to a 30-year repayment and 12 months of no payments. The credit score of applicants is the primary factor in approval.
- Paycheck Protection Program (PPP) – Section 7(a) of the SBA (not yet available)
Information on how to apply for the newly established PPP will be provided once it is available. This temporary program will allow small businesses and individuals to seek loans of up to $10 million through the SBA’s 7(a) loan program to help cover, among other items, salaries, benefits, paid sick and medical leave, mortgage or rent payments. Certain borrowers would be eligible for loan forgiveness equal to the amount (not to exceed the principal amount of the loan) spent during an eight-week period after the origination date of the loan on payroll costs; interest payment on any mortgage incurred before Feb. 15, 2020; rent on any lease in force before Feb. 15, 2020; and utilities for which service began before Feb. 15, 2020. The amount forgiven would be reduced in proportion to any reduction in employees retained and to the reduction in pay of any employee beyond 25 percent of prior year compensation.
The U.S. Senate Committee on Small Business and Entrepreneurship has made available an initial FAQ on the PPP while AAOMS’s Washington, D.C., lobbyists have information on both small business loan programs.
