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  • $10,000 Grant from CARES Act?

    Does the CARES Act allow sole proprietors (like teleradiologists) who have lost tremendous income due to lost volume to gain access to the potential $10,000 emergency grant that the government is offering via the CARES Act? My (vague) understanding is that if you use it over the course of 8 weeks for expenses such as a payroll (for yourself), it qualifies? However I am still confused about the overall law and if I am understanding it correctly? As most of us on this forum will not qualify for any of the stimulus checks, I am curious if this is a legal option to regain lost income and thus I would want to take advantage of it. Thank you in advance!

  • #2
    1. The $10,000 Emergency Grant/cash advance is from the SBA's Economic Injury Disaster Loan. When you apply for the EIDL, you can get the advance. Even if you do not qualift for the loan finally, you do not have to pay it back.
    2. This is different from the Paycheck Protection Program Loan- which is what you are actually referring to. This has a much larger forgivable amount- payroll expenses, rent/mortgage and utilities for an 8-week period following your loan origination.
    Both (1) and (2) above are part of the CARES Act.
    3. You are eligible for both as a sole proprietor
    4. If you get the $10k grant and then apply for PPP Loan, your forgiveness is reduced in that amount.
    All of this broken down here: https://physicianfinancebasics.com/c...ian-practices/
    Hope it's helpful.
    Also, apply early or get in line- it's going to be a melee! Stay safe
    -PFB
    Blogger at Physician Finance Basics

    Comment


    • #3
      Originally posted by Physician Finance Basics View Post
      1. The $10,000 Emergency Grant/cash advance is from the SBA's Economic Injury Disaster Loan. When you apply for the EIDL, you can get the advance. Even if you do not qualift for the loan finally, you do not have to pay it back.
      2. This is different from the Paycheck Protection Program Loan- which is what you are actually referring to. This has a much larger forgivable amount- payroll expenses, rent/mortgage and utilities for an 8-week period following your loan origination.
      Both (1) and (2) above are part of the CARES Act.
      3. You are eligible for both as a sole proprietor
      4. If you get the $10k grant and then apply for PPP Loan, your forgiveness is reduced in that amount.
      All of this broken down here: https://physicianfinancebasics.com/c...ian-practices/
      Hope it's helpful.
      Also, apply early or get in line- it's going to be a melee! Stay safe
      -PFB
      PFB do you have any idea about timeframe for EIDL advance? I submitted application yesterday - the new "disaster advance" link seemed to only come online yesterday

      also, does not seem PPP application has come online yet. do you know otherwise?

      Comment


      • #4
        "Paycheck Protection Program Loan"
        The forgiveness also requires submission of the documentation, number of employees and no reduction in pay. Otherwise, some amounts may need to be repaid.

        Comment


        • #5
          Originally posted by Darkroominvestor View Post
          Does the CARES Act allow sole proprietors (like teleradiologists) who have lost tremendous income due to lost volume to gain access to the potential $10,000 emergency grant that the government is offering via the CARES Act?
          Yes, as long as you have 1099 or small biz income last year, you are eligible to apply for the loan and grant. I believe you get the grant immediately (within 3 days) and then the loan portion is another process, but I'm unsure of the timing.

          I applied for it and I had sole proprietor telerads locums income last year, if that helps any.
          Last edited by xraygoggles; 03-31-2020, 06:16 PM.

          Comment


          • #6
            This is a part of the Paycheck Protection Program. You should apply asap because there is a limited amount of funds available - $10B, i believe). Very easy to do and we are sending instructions to clients in the morning. Laura walked a client though today and was surprised at the simplicity.

            I am at home and don’t have the link but may be able to post tomorrow if someone else has not already done. (Sorry, have a lot of appointments and also have been out sick)
            Financial planning, investment management and CPA services for medical and high-income professionals | 270-247-6087

            Comment


            • #7
              Originally posted by Physician Finance Basics View Post
              1. The $10,000 Emergency Grant/cash advance is from the SBA's Economic Injury Disaster Loan. When you apply for the EIDL, you can get the advance. Even if you do not qualift for the loan finally, you do not have to pay it back.
              2. This is different from the Paycheck Protection Program Loan- which is what you are actually referring to. This has a much larger forgivable amount- payroll expenses, rent/mortgage and utilities for an 8-week period following your loan origination.
              Both (1) and (2) above are part of the CARES Act.
              3. You are eligible for both as a sole proprietor
              4. If you get the $10k grant and then apply for PPP Loan, your forgiveness is reduced in that amount.
              All of this broken down here: https://physicianfinancebasics.com/c...ian-practices/
              Hope it's helpful.
              Also, apply early or get in line- it's going to be a melee! Stay safe
              -PFB

              Thank you for this. Your site is great.

              To clarify my understanding of item 4 - if one successfully obtains the $10k EIDL Advance in addition to the PPP Loan, that the $10k is no longer a grant. It now must be repayed. Is my understanding accurate?

              Also, since the PPP ceiling is 100K annually, it seems that most of docs would max out at around 20k of PPP loan per physician.

              Comment


              • #8
                Originally posted by jfoxcpacfp View Post
                This is a part of the Paycheck Protection Program. You should apply asap because there is a limited amount of funds available - $10B, i believe). Very easy to do and we are sending instructions to clients in the morning. Laura walked a client though today and was surprised at the simplicity.

                I am at home and don’t have the link but may be able to post tomorrow if someone else has not already done. (Sorry, have a lot of appointments and also have been out sick)

                I believe this is where you can find the info to apply: https://www.sba.gov/funding-programs...on-program-ppp

                Applications can start processing April 3.

                The application itself looks very straightforward.

                Comment


                • #9
                  Originally posted by GastroMastro View Post

                  PFB do you have any idea about timeframe for EIDL advance? I submitted application yesterday - the new "disaster advance" link seemed to only come online yesterday

                  also, does not seem PPP application has come online yet. do you know otherwise?
                  -You are supposed to get the cash advance within 3 business days of applying and requesting it
                  -PPP applications will start April 3rd for small businesses and sole proprietors. And April 10th for independent contractors and the self employed.
                  -Talk to your lender and "get in line"
                  -And start gathering your documentation- last couple of years of Tax returns, Financial Reports, last 1 year of Payroll info, etc.
                  -Here is a sample application form from SBA.gov: https://www.sba.gov/sites/default/fi...lication_0.pdf

                  Good luck and keep us posted!
                  Blogger at Physician Finance Basics

                  Comment


                  • #10
                    Originally posted by xraygoggles View Post

                    Yes, as long as you have 1099 or small biz income last year, you are eligible to apply for the loan and grant. I believe you get the grant immediately (within 3 days) and then the loan portion is another process, but I'm unsure of the timing.

                    I applied for it and I had sole proprietor telerads locums income last year, if that helps any.
                    -The Emergency Grant/cash advance from the SBA's EIDL should be available within 3 days
                    -PPP Loans should start processing end of this week and next week.
                    But I did read somewhere that it may be until May until we see any of the funds. For those who apply for the EIDL, the grant will help to some degree
                    Blogger at Physician Finance Basics

                    Comment


                    • #11
                      Originally posted by jfoxcpacfp View Post
                      This is a part of the Paycheck Protection Program. You should apply asap because there is a limited amount of funds available - $10B, i believe). Very easy to do and we are sending instructions to clients in the morning. Laura walked a client though today and was surprised at the simplicity.

                      I am at home and don’t have the link but may be able to post tomorrow if someone else has not already done. (Sorry, have a lot of appointments and also have been out sick)
                      Feel better soon, Johanna! You're not allowed to be sick <3
                      Blogger at Physician Finance Basics

                      Comment


                      • #12
                        Originally posted by JT439 View Post


                        Thank you for this. Your site is great.

                        To clarify my understanding of item 4 - if one successfully obtains the $10k EIDL Advance in addition to the PPP Loan, that the $10k is no longer a grant. It now must be repayed. Is my understanding accurate?

                        Also, since the PPP ceiling is 100K annually, it seems that most of docs would max out at around 20k of PPP loan per physician.
                        Thank you for reading, glad you found it useful!
                        As for (4)- yes- amounts to the same thing. Either you pay back the $10k grant or your PPP forgiveness is reduced by $10k.
                        -8 weeks of payroll cost per employee: not just gross wages (up to $100k) but also benefits such as paid vacation time, sick/family leave, health insurance premiums and retirement benefits. 8 weeks of wages for up to $100k/physician implies about $15k right there. Along with the other stuff, you're close with your $20k estimate. But to calculate max loan amount, remember the loan also includes mortgage/rent and utilities (very broadly defined)- these will be very different for each practice.
                        -In the end though, the payroll expenses have to be 75% or greater of the entire forgiven amount.
                        -Also wanted to point out the new information on loan terms: initially was up to 10 yrs for repayment- they brought it down to 2 yrs.
                        -Interest rate went down from up to 4% to 0.5%
                        -Payments can be deferred up to 6 months, but interest will continue to accrue.
                        Blogger at Physician Finance Basics

                        Comment


                        • #13
                          Originally posted by Physician Finance Basics View Post

                          -You are supposed to get the cash advance within 3 business days of applying and requesting it
                          -PPP applications will start April 3rd for small businesses and sole proprietors. And April 10th for independent contractors and the self employed.
                          -Talk to your lender and "get in line"
                          -And start gathering your documentation- last couple of years of Tax returns, Financial Reports, last 1 year of Payroll info, etc.
                          -Here is a sample application form from SBA.gov: https://www.sba.gov/sites/default/fi...lication_0.pdf

                          Good luck and keep us posted!
                          You say April 3 for small biz and sole proprietors. and April 10th and indep contractors and self-employed. are you sure you did not mean to say that sole proprietors go in the april 10th? how can April 3 for sole proprietors but Aprili 10th be for IC and self-employed? all sole proprietors are self employed. Please clarify. thanks.

                          Comment


                          • #14
                            Originally posted by GastroMastro View Post

                            You say April 3 for small biz and sole proprietors. and April 10th and indep contractors and self-employed. are you sure you did not mean to say that sole proprietors go in the april 10th? how can April 3 for sole proprietors but Aprili 10th be for IC and self-employed? all sole proprietors are self employed. Please clarify. thanks.
                            I realize the discrepancy there, dont know what to make of it. Likely will depend on your lender. Here is the quote from Dept of the Treasury:
                            "When can I apply?
                             Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.  Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.  Other regulated lenders will be available to make these loans as soon as they are approved and enrolled in the program."
                            Source: https://home.treasury.gov/system/fil...ct%20Sheet.pdf
                            Blogger at Physician Finance Basics

                            Comment


                            • #15
                              Originally posted by Physician Finance Basics View Post

                              I realize the discrepancy there, dont know what to make of it. Likely will depend on your lender. Here is the quote from Dept of the Treasury:
                              "When can I apply?
                               Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.  Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.  Other regulated lenders will be available to make these loans as soon as they are approved and enrolled in the program."
                              Source: https://home.treasury.gov/system/fil...ct%20Sheet.pdf
                              Wow, that really makes no sense. I reviewed your link. I get the sense that they mean sole proprietorships that are "business-like"can apply early on 4/3 versus, say, a dentist who is a sole proprietor and only pays himself with 1099 income, should wait until 4/10. What do you think about that?

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