Dear Schiff Dental Clients
Good afternoon to all! I hope each of you are well and safe
We are here for you!
Schiff Dental Client Update as of Thursday, April 30, 2020 at 4:00 PM
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PPP Loans – I now have my PPP Loan , what should I be doing?
Many of you have received your PPP Loans. If your practice is located in the Commonwealth of Virginia, you are more than likely going back to work this Monday, May4th. You should be on schedule to satisfy the 75% / 25% , PPP Loan requirements. This is also true for our clients in West Virginia (May 11th) as well. Texas is scheduled for May 11th and District of Columbia is scheduled for May 15th. So , each of you should be well on your way to satisfy the PPP Loan Forgiveness. However, our clients in Maryland (TBD) and North Carolina (TBD), are to be determined.
We are stressing you (Maryland & North Carolina) wait to spend your PPP Funds until next Tuesday, May 5th. The reason for this is, we are awaiting the US Treasury guidance as well as the impact of the ADA (below) and the AICPA (also below). The guidance we are seeking, will answer many of your questions, such as…….
For example…..
- Can we spend our PPP Funds on May 2020 Rent?
- Can we spend our PPP Funds on our current utilities?
- Can we pay some of our team members, but not all team members?
- Can we just pay the Partners and not pay the team?
- If I received $100,000 in PPP Funds, and spend $60,000 on payroll Costs and $25,000 on intended costs, what is the ratio of Loan Forgiveness? ($85,000/$100,000 ?) x $15,000 or ($60,000/$75,000) x $15,000 or another method?
- If the doctors pay themselves more than $15,385, will they be penalized in regards to forgiveness?
- What if the Doctors pay themselves $15,385 only through payroll but take a Sub S distributions too? Is that a problem?
- Can we wait until week #4 and start the payroll process> or better yet , can we wait until week # 8 and pay 8 weeks worth of payroll then?
- Can I pay April, May and June Rent as part of my intended costs?
- Can I pay the intended costs now and just wait for payroll costs in the near future?
- I have my PPP funds, I intend to pay all of my employees, but some want to stay on unemployment…is this a problem?
The above, is an example of many of the questions we are receiving at this time. We need more guidance from the US Treasury to advise you . We have all seen over the last 6 weeks, how the “rules and regulations” change (almost hourly!), and I suspect we will have another change or two before this is all done. So, please be patient , at least and until next Tuesday, May 6th to allow us to guide you!
If you feel you need to start spending your PPP funds now, please do so. However, we are asking you to please wait a couple of days to allow for the guidance to occur. Why are we asking you to wait? We are working with closely with the ADA on the PPP Loan process and we suspect there will be changes to the PPP Loan forgiveness program as a result of the ADA’s involvement. The ADA is being very supportive very understanding and they are doing a great job in representing you. I am proud to be associated with them! Please understand , there are no guarantees, but we are doing our best , to create practical solutions at this time.
ADA Update
This afternoon, I spoke with the ADA (Government Affairs) on the following subjects
- PPP Loan Forgiveness starts when the States Governor’s open their respective States, NOT when the monies were funded! vs. current rules that state you must start spending now, upon receipt of the funds.
- PPE Equipment is acquired in 2020, would qualify as an “investment tax credit at 100%
- PPE supplies, if acquired in 2020, would qualify as PPP Loan forgiveness as “other intended costs”, in addition to Rent & Utilities.
As I mentioned above, the ADA is well aware of the above issues. I have discussed these at length with them. Please also see the attached letter. The ADA letter is very much on point!
Also, the ADA Grassroots action will take place next Tuesday (May 5th). The ADA is hoping they will get the attention of Congress to address these issues. Congress resumes in mid May 2020.
AICPA Update
The AICPA (American Institute of Certified Public Accountants) is the world’s largest member association representing the accounting profession, with more than 431,000 members. The AICPA has also weighed in on the PPP Loan Forgiveness Program
Please read the AICPA suggestions on when the “8-week period” should begin
This is exactly of what I have been saying all along>>> …… The eight-week period should commence once stay-at-home restrictions are lifted, not when loan proceeds are received.
I have shared this with the ADA as well. They are fully aware the AICPA is being fully supportive of when “does the 8-week period begin”, along with the ADCPA
US Treasury Guidance
We are still uncertain when the Treasury guidance will be released. As a result, the ADCPA Partner Group will meet on Monday, May 4th at 9 PM EST, in order to arrive at the “ADCPA Strategy”. This meeting will allow us, to consult with our clients on how to maximize PPP Loan Forgiveness as well as answer many of the questions that have been asking over the last few days
PPP Accounting procedures
Special “thanks” to Dr Clayton McCarl (Greenbelt Maryland) for sharing how he has set up special accounting procedures. The procedures that Clayton has set up , will allow him, to account for the various disbursements out of the PPP Loan Proceeds. For example, all of the future payroll will come out of the newly created PPP checking account. ADP Payroll was very helpful in setting this up. Clayton has also set up reoccurring monthly expenditures out of the newly formed checking account as well. These procedures, if set up properly, will create ease when rendering an accounting to your bank after the 8-week period expires.
PPP Loan “resources” – smaller banks
Yesterday, it came to our attention, you may want to consider using a smaller bank (AMEX or PayPal, etc ) for your PPP Loan Application process. We are recommending, if you have not heard from your primary bank on the status of your PPP Loan Application, you should consider applying to a smaller bank. Special “thanks” to Dr Jack Kayton (Charlottesville VA) for bringing this resource to my attention. Here is who Jack has worked with and speaks highly of.
Seth G. Bokelman
Market President
1111 Greenville Ave
Staunton, Virginia 24401
Cell: 540-520-4639
Fax: 540-887-6504
I have also reached out to Seth, and he said to mention my name when applying for your PPP Loan, so the loan process can be expedited.
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We are here for you!
Please stay well
My best
Allen
