April 6, 2020

The Small Business Administration (SBA) released an interim final rule on April 2 addressing the Paycheck Protection Program (PPP), a new SBA loan option created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The PPP is designed to help small businesses with payroll and related costs for an eight-week period. APMA encourages members to apply for this loan as soon as possible, as the money will be distributed on a first come, first served basis. 

This interim final rule clarifies the following:

• Expanded lending options:
  
  Any existing SBA lender, federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating can service the loan. Podiatrists should consult with their local lender to determine whether it is participating.

• What the loan can be used for:
  
  Podiatrists can use the loan for payroll purposes, benefits payment, rent, mortgage interest, utilities, and the like. The SBA expects that 75 percent of the loan proceeds will be used for payroll costs.

• Updated loan terms:
  
  Podiatrists who borrow under this program may owe money when their loan is due if they use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the eight weeks after getting the loan. They will also owe money if they do not maintain their staff and payroll. If any or portion of the loan is not forgiven, these loan terms apply for all borrowers. The SBA has updated the fixed interest rate for repayment of this debt to 1 percent, instead of the 0.5-percent fixed interest rate that was proposed originally.

APMA has created a comprehensive resource page that addresses these updates to the PPP in addition to other small business financial resources such as the Economic Injury Disaster Loan (EIDL) at www.apma.org/COVID19SBA. 

Please note: APMA is partnering with Marcum LLP to offer its members a one-hour webinar on Tuesday, April 7, at 5 p.m. ET, about recent COVID-19 legislation and resources for you and your practice. We strongly recommend attendance at this webinar—register today! If you are unable to attend, the webinar will be recorded and posted this week.

If you have general questions about the PPP or other small business resources available during the COVID-19 crisis, please contact the APMA Health Policy and Practice Department at healthpolicy.hpp@apma.org.

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