Although there have been many helpful articles published about the PPP loan, there continues to be some confusion about how to best handle this plan by dentists. The following is to provide some additional information, links to an expense tracking Excel worksheet, and the Forgiveness Form that will be used to submit amounts requested to be forgiven.
Funds are Still Available and SBA is Relaxing Standards
Initially, there was a shortage of funds but the restrictions placed on large publicly traded companies have provided ample funding for offices that would still like to apply. If your office hasn’t applied for a loan it may be worthwhile considering.
Some of the most recent and significant clarification that could help dentists is that rent is not just for office space but can include lease payments on personal property items, such as office equipment and computers and also dental equipment. Similarly, a business “mortgage interest payment” includes loans for real property and personal property, and as a result, interest paid on loans for dental equipment and other personal property items can be included and forgiven. Just make sure these leases or loans were in place prior to February 15, 2020, to qualify.
The program has been amended to include a Safe Harbor Provision for loans under $2 million. This will significantly minimize audit potential for dentists as it is deemed that the funds are needed and that there was not an alternate source of funds available. So, this can make dentists relax about the utilization of this program.
In addition, they are evaluating extending the amount of time to use the funds beyond the eight-week period to assist smaller businesses.
Expense Tracking
Many dentists have heard that they should open a separate checking account to track payments from the loan which isn’t required. If you did or didn’t open a separate account is fine. It will be important to track and total authorized expenses during the eight weeks that the loan was funded to complete the Loan Forgiveness request. It may not be necessary to get caught up in too fine of details such as employer-paid taxes, etc., as it appears, they may relax rules for usage. Capturing substantial allowable costs by category will be sufficient. ASI has developed a sample Excel spreadsheet that you can use to track and total expenses by category. You can also use it as a budgeting tool by completing estimated costs to see how your totals work out.
