April 15, 2020
As part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act), Congress created the Small Business Association Paycheck Protection Program (PPP). This program allows small businesses of less than 500 employees to apply for forgivable, zero-fee loans of up to $10 million to cover approximately 8 weeks of payroll and other operating expenses. The PPP loans are forgivable if 75% of the loan is dedicated to payroll expenses.
Because of the widespread financial distress among small businesses across the country, private banks and lenders were overwhelmed with applications. Some even stopped taking applications within the first few days of the program. As of April 15, 2020, the program had already run out of money.
Congress is working to increase funding for the program by another $250 billion and the Federal Reserve announced it would back another $250 billion in loans. The California Medical Association (CMA) recommends that interested physicians continue to pursue local lenders so they are in a good position when new funding is released. CMA will notify physicians when the additional funding is approved.
For more information about the Paycheck Protection Program, and other financial assistance available to physicians during this public health emergency, see CMA’s COVID-19 Financial Toolkit for Physician Practices.