April 09, 2020
Area(s) of Interest: Advocacy Practice Management
The federal government announced new measures on Thursday aimed at helping small and medium sized businesses – including physician practices – through the COVID-19 crisis.
The Federal Reserve announced a $2.3 trillion spending package, including $500 million to state and local governments, to help offset the delay in local tax receipts caused by the deferral of the tax filing deadline. California has delayed its income tax filing deadline to July 15 and many counties are delaying collection of property tax payments, which were originally due by April 10.
The Fed’s new Main Street Lending Program will provide $600 billion in loans for medium sized businesses with less than 10,000 employees or revenues less than $2.5 billion.
The four-year loans would allow for interest deferred payments for a year and would be at least $1 million in size. Under the program, banks will retain a 5% share of the loan and sell the remaining 95% to a facility to be set up by the Fed.
Congress is working to quickly pass a new package within the week. Senate Republicans failed to pass a bill today on unanimous consent to provide an additional $250 billion into the Paycheck Protection Program, which offers low-interest loans to small businesses because Democrats want the legislation to also include an additional $250 billion in extra money for hospitals, physicians, state and local governments, and food stamp recipients. A compromise is expected.
The California Medical Association (CMA) continues to lobby state and federal leaders for more financial relief for physician practices. Among the CMA asks of federal leaders are ensuring additional funding for forgivable federal small business loans that are set aside specifically for physician practices, and sending an additional $100 billion in direct and automatic assistance to physician practices and hospitals and removing the 10% interest rate on the Medicare advance payments.
CMA will publish additional details on the Federal Reserve program once they are made available.
For a full list of financial resources available to physician practices during the COVID-19 emergency, see CMA’s COVID-19 Financial Toolkit for Medical Practices.