This is the first of a four-part series prepared by Marcum, LLP, to help podiatry practice owners understand COVID-19 resources available to small businesses and to begin planning for recovery. The other articles in the series are linked below:
Without a doubt, the COVID-19 pandemic has severely tested the nation’s economic stability. In response, Congress approved funding for a $2 trillion aid package to help struggling businesses—especially small businesses ordered to temporarily close operations.
The Families First Coronavirus Response Act provides assistance for employees affected by the pandemic through expanded unemployment benefits, COVID-19 testing, extended sick leave and Emergency Family and Medical Leave (FMLA) provisions for employers with 500 or fewer employees.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides loan assistance to businesses, primarily through the Paycheck Protection Program (PPP) and the Emergency Injury Disaster Loan (EIDL) program. Each is intended to help keep businesses afloat and retain employees. Other forms of assistance include relief to health-care providers in the form of Medicare relief funding and additional lending programs.
It can be daunting for small business owners to navigate these programs, keep up with the legislative actions and understand which provisions are best for your practice. The following information provides an overview of each program.
Congress approved two disaster relief loan programs for small businesses affected by COVID-19. A business may choose only one of these programs. After funds were quickly depleted for the two programs within two weeks, Congress approved another $370 billion under the Paycheck Protection Program and Health Care Enhancement Act.
Paycheck Protection Package Loans
The CARES Act included $349 billion in forgivable PPP loans for small businesses with fewer than 500 employees. Congress approved an additional $320 billion to replenish the funds in April.
PPP loan provisions include:
Emergency Injury Disaster Loans (EIDLs)
Congress added $50 billion to the $10 million program in April after the high demand for the loans. In early May, the SBA reopened its EIDL portal for agricultural businesses only, though loans for other businesses may be considered at a later date.
The CARES Act provided for $100 billion in relief funding to health-care providers based on their 2019 traditional Medicare fee-for-service payments. Providers will only receive a payment if they billed Medicare in 2019 or provided diagnoses, testing, or care for individuals with possible or actual COVID-19 cases after January 31, 2020.
As of April 24, the Health Resources and Service Administration distributed $30 billion to providers via automatic deposit or by paper check. There was no need for providers to apply to receive the funds. Some received a second payment based on Medicare Cost Reports. If a provider meets certain terms and conditions, the payments received will not need to be repaid at a later date.
Some providers have criticized the allocation process, claiming that some geographic areas that have a large number of COVID-19 cases have received less payment based on fewer Medicare fee-for-service beneficiaries.
Additional Provider Funding
Medicare providers who have already received payment as of Friday, April 24, 2020, may now apply for additional funding. Providers are required to submit data regarding annual revenue and estimated COVID-related losses by using the Provider Relief Fund Application Portal.
Providers must attest to having received the payment via the Provider Attestation Portal and agree to the terms and conditions on the portal.
Providers will need the following documents to begin the application process:
If a provider has not received a payment, they should not use the General Distribution Portal and may still receive funds in other distributions.
Loans for Community Lenders
When Congress reauthorized funding for the CARES Act, lawmakers included $60 billion to small lenders and community banks. The goal is to alleviate the burden on small banks but also to make it easier for small business owners to work with their community banks to receive lending and apply for the loans. Providers will need to work closely with their lenders to attain funding for the programs described above. Marcum can help facilitate these relationships; see contact information at the bottom of this page.
Main Street Lending Program
The Federal Reserve is expanding its emergency Main Street lending program intended to help corporations with damages related to COVID-19. According to the Fed, the goal of the program is to help credit flow to small and midsize businesses that were in sound financial shape before the pandemic. The minimum loan size will double to $1 million. Unlike the PPP, Main Street loans are not forgivable. Launch details have not yet been announced.
Practice owners should be aware of the following tax provisions and implications from CARES Act tax cuts.
Employee Retention Tax Credit
Delay of Payment of Employer Payroll Tax and Self-Employment Tax
Net Operating Losses (NOL)
Visit Marcum’s Coronavirus Resource Center for up-to-date information.
This information is accurate as of May 13, 2020, and is subject to change. Your Marcum tax advisor will keep you posted on updates.