How Dentists Can Cope with COVID-19 Related Temporary Loss of Revenue

Is my practice going to run out of money? How am I going to pay my employees? How am I going to pay the rent, loan payments, and other obligations that help my practice keep afloat? These are the kind of questions other dentists and small business owners are asking themselves over the last couple of weeks as revenue began to sink under the weight of the COVID-19 crisis.

Revenue is a concern, but even more, is having strains on the cash flow to survive this economic hit without a definitive end in sight. So, what options do you have right now to help your practice cope with this temporary loss of revenue?

I invite you to read the below research about what options you may have to keep your business alive and guard your financial freedom.

1. Consider the Federal Government Aid Programs

The $2 trillion stimulus package passed by Congress is the largest relief package in U.S. history. Key components of the legislation provide support for small businesses as follows:

A. The Paycheck Protection Program (PPP) is offering $350 billion to help small businesses avoid laying off employees. The loans are available to companies with fewer than 500 employees. The purpose of this program is to help you cover expenses from February 15th through June 30th. The highlight of this program is that the government will forgive up to 100% of the loan amount if you use the funds to pay payroll, interest payments on mortgages, rent, or utilities over eight-weeks during the loan period. Otherwise, the interest rate will not exceed 4%. These loans will be processed and administered by private banks, reportedly starting as early as this Friday.

PPP loans will be administered by private lenders (e.g. banks). You must keep in mind that the approval of the loan will depend on various factors just like when you apply to a loan. Following is a list of the most active banks (lenders) in the dentistry market in South Florida and their message:

Chase for Business; A message from Jennifer Roberts, CEO of Chase Business Banking
Bank-of-America-coronavirus; Bank of America is offering additional support to small business clients through its Client Assistance Program.
Wells Fargo Small Business; there is nothing specific about the coronavirus
Citibank; Range of assistance measures include fee waivers, hardship programs, and small business support
PNC COVID-19 Payment Hardship Request;

B. Emergency Economic Injury Grant and Economic Injury Disaster Loan (EIDL). Under this program, a qualifying business is eligible for an emergency grant of up to $10,000 within three days of applying for an EIDL. Technically, this $10,000 is an advance on the loan but doesn’t need to be repaid under any circumstances. This advance and loan can be used for any business operating expenses (payroll, supply chain disruptions, rent, etc). You must apply for this program directly with the SBA.

Can you apply for both the PPP and the EIDL?

Currently, companies can apply for and receive both a PPP loan and an EIDL loan. The funds must be used for different expenses (eg. the PPP can cover payroll expenses for eight weeks and the EIDL can help with other operating expenses).

C. The Small Business Debt Relief Program. The SBA is providing financial reprieve to small businesses and will automatically pay the principal, interest, and fees of current 7(a), 504 and microloans and future ones as long as these are issued prior to September 27, 2020.

For detailed information about federal government aid programs, the resource guide put together by the US Senate with relevant details, including exceptions to who qualifies for these funds.

2. Stay Active, Keep Your Practice Afloat.

A. Build trust and loyalty with your current patients. Inform your patients you are taking care of emergency consultations. Your patients still need you and need to know what to expect from you. For non-emergency situations, you can help your patients through Telemedicine. There are tools like Google Meet, Zoom, and many others that are offering great deals for this.

B. Attract New Patients: This is not the moment to stop promoting your practice. You can provide sound advice to patients about oral health to them and their families. You can also create content that is helpful yet sensitive to the current crisis.

C. Review Agreements and understand the Force Majeure clause on your agreements. Understanding what leverage, you have in terms of current agreements with current suppliers, landlords, mortgage companies and more could mean the opportunity to defer payment and/or lower interest rates during the crisis.

D. Invest in your employees: If they are at home, you can take advantage of their free time to train them in new procedures or new roles

E. Partner with Other Dentists or Investors: Sometimes partnering with other dentists means creating a money pool with other colleagues to harness the purchase power in front of suppliers & vendors for service or product that will be vital to your practice, once this outbreak is over. For instance, you could negotiate price with a CE institution for a group of people rather than going alone and pay for your staff institute full price

3. Close At The Right Time

We hope this is not an option, but if you decide to Close your business to overcome your particular economic hardship, reach out to Hector Yusti from Dental Broker Florida to explore other options that otherwise you may overlook…

Héctor Yusti, MBA
Dental Broker Florida
hyusti@dentalbrokerflorida.com
CRE @ DBF

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