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Q&A: Coronavirus (COVID-19) & the CARES Act

Camala C. Bailey, CPA, CVA, CPA-4-Vets

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Published on April 6, 2020, at 5:04 PM

What is an SBA crisis loan? How do I apply? Who is eligible, and when will the money arrive?

Under the recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act, there are a few loan programs available that can help veterinary practice owners. The loan programs listed below are available to small businesses with 500 or fewer employees, an eligibility requirement most veterinary clinics will meet.

The Small Business Administration (SBA) is implementing guides to provide information about these programs and their initiatives. Checking the SBA website frequently is recommended; details on these programs are being updated regularly.  

Currently available programs include:  

Paycheck Protection Program Loans

Those who qualify for a Paycheck Protection Program (PPP) loan may receive capital up to $10 million, at a 1% interest rate, to cover the cost of retaining employees and certain other expenses.

It is unclear how long it will take for money to be disbursed once a loan package has been accepted, because of the overwhelming demand on SBA lender banks for PPP loans and because lenders continue to receive updated guidance from the SBA on how to handle and process the loans.

General eligibility requirements* 

  • Must be in operation on February 15, 2020
  • Must be a small business concern with fewer than 500 employees  
  • May be individuals who operate as sole proprietorships, independent contractors, and eligible self-employed individuals


Has your practice applied for the Paycheck Protection Program (PPP)?

Economic Injury Disaster Loans and Loan Advance

Those who qualify may receive a $10,000 Emergency Economic Injury Grant (also called a loan advance, according to the SBA) within 3 days of applying for the Economic Injury Disaster Loan (EIDL). The EIDL provides up to $2 million of low-interest working capital to those affected by the temporary loss of revenue. 

General eligibility requirements* 

  • Small business concerns with 500 or fewer employees
  • Sole proprietorships, with or without employees 
  • Independent contractors 
  • Cooperatives and employee-owned businesses 

Other than receiving the $10,000 grant within 3 days of applying for an EIDL, the next disbursement of $25,000 or more may take several weeks because of the record volume of loan requests.

Loans should be applied for immediately to receive disbursements as soon as funds are made available.

*see SBA website for specific details

Will SBA loans convert into a grant (ie, loan relief) after a period of several months if no employees are laid off? What are the restrictions?

For PPP loans, loan forgiveness may be requested. All employees must be retained for the covered 8-week period. Forgiveness requested may be equal to the sum of payroll costs incurred during the period, plus any payment of interest, mortgage obligation or utility payments, compared to the previous year.  

Applications should be placed through an SBA Lender (bank) and should provide detailed documentation verifying payroll, rent, mortgage interest, utility payments. The practice will be required to certify as the business representative that the documentation provided meets the program guidelines.

The $10,000 loan advance (Emergency Economic Injury Grant) provided by the EIDL is automatically considered grant and is forgiven. There are currently no provisions for forgiveness for loans given through the EIDL program other than the initial advance that is considered a grant. Any remaining funds loaned beyond the initial $10,000 would need to be repaid.


Has your practice applied for an SBA Economic Injury Disaster Loan?

Are there other avenues for financial support if a practice is in crisis?

Two additional programs offered by the SBA may be helpful to practice owners.

SBA Debt Relief Program

The SBA Debt Relief Program provides a reprieve to small businesses impacted by the health crisis, and is available to those have recently purchased or started their practice.

General eligibility requirements* 

  • SBA will pay the principal and interest of new 7(a) loans issued prior to September 27, 2020 
  • SBA will pay the principal and interest of current 7(a) loans for a period of 6 months
*Talk to your lender to learn more
SBA Express Bridge Loan Pilot Program

The SBA Express Bridge Loan Pilot Program allows small businesses with an existing relationship with SBA to access up to $25,000 before EIDL funds are disbursed. When EIDL funds are received, the SBA express funds would be repaid in full or part. This program may be beneficial to veterinary practice owners who need immediate funding while waiting for EIDL funds.

Practice owners should talk to their insurance agents about what policies may cover, bankers and lenders, and landlords or lien holders. Proactively prioritizing repayment schedules can help minimize the impact on the clinic.

Finally, and most importantly, veterinary clinics should continue to communicate with and serve clients. Clients should be reminded, through email, social media, text, and website updates, that veterinary services are essential and open. Loans will get veterinary clinics through the tough times, but clients and patients are the key to paying back loans and remaining open.  

For global readers, a calculator to convert laboratory values, dosages, and other measurements to SI units can be found here.

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