PPP Forgiveness – Now What?
I am seeing a lot of dental practices ignoring or perhaps forgetting that they need to apply for their PPP Forgiveness by the end of the year. I know, out of sight, out of mind. However, it is time to get in gear before the end of the year to avoid having to make payments in the beginning of 2021.
Many large banks have been “slow-walking” their Forgiveness process due to the many last minute changes that continue to creep up from the Small Business Administration. Smaller banks or credit unions have been a bit better about their client outreach. I understand why the big banks are slow to be proactive on moving their clients forward as I survived the PPP hell earlier this year in my prior career as a banker. The banks had little time to prepare and even when they thought they had everything in order the government would change the rules. It was a nightmare for all. Now we are in the Forgiveness phase and things are still changing.
Unfortunately, a delay on your part could mean you will begin making payments early in 2021 even though you expect the full loan amount to be forgiven. Begin the process immediately by contacting your bank and banker. Each bank will have it’s own process and some will have their own application. Others will have you complete the SBA application for Forgiveness. Save time and headache by contacting your bank now. They will guide you through their process, their application and the SBA’s documentation requirements.
The banks has sixty (60) days to certify your loan application is complete with all documentation and you qualify for some or all loan proceeds forgiven. The clock starts ticking only after the bank has received all the documentary proof of what you spent the funds for. Ie., payroll, mortgage, utilities, etc. After that the SBA can take up to ninety (90) days to approve you and send the money to the bank to payoff or pay-down your PPP loan.
To complicate matters when you received your PPP funds will make a difference in your documentation. As I started earlier, the rules kept changing. Do not try to do this on your own. You must contact the bank that gave you the funds to apply for Forgiveness. Good Luck and remember to be patient with your bank and banker. After all it is the government they are working with and they must be extra careful when submitting your application for Forgiveness to ensure you have the best chance possible of getting all your loan forgiven.
Below you will find the link to the SBA’s PPP Forgiveness page as a resource.
If you’re looking to have a more in-depth conversation on this topic, please don’t hesitate to reach out to us.
General Financing for Dental Practices
As a former healthcare banker that worked specifically with privately owned dental practices, I can honestly say that 85-90% of all the dentists I worked with had no clue how to manage a business or general financing. This is not their fault. They paid good money and lots of it to learn how to be a dentist. It is truly unfortunate that probably, 95% of the dental schools provide no curriculum on owning a practice.
Compound that with high school and under-graduate curriculum that do not provide any insight into personal finances. You have a disaster waiting to happen. It is no wonder that so many of the practices we work with are highly leveraged, choking on high interest rate loans both personally and professionally, have never prepared a budget, have little knowledge of how they are performing against dental benchmarks of high performing practices and are stressed out about their scheduling when they have gaps.
They hire bookkeepers and accountants to handle their books and prepare their taxes. What they don’t do is sit down with them quarterly, semi-annually or even annually to understand what they are looking at and what the numbers mean let alone how to effect their bottom line.
TAKE ACTION NOW!
If you see yourself in the above, take action now. Find a CPA that works specifically with dental practices and knows the benchmarks and will talk to you at least annually about what the numbers mean. Find a banker that knows your industry and can analyze your debt, personal and business, to see where you can consolidate, refinance or pay it off sooner while still allowing room to save for retirement or college for your children. If anything gain understanding of general financing for dental practices
Finally, get a free analysis of your practice from AMP to see where you can improve quickly so you can reduce your stress, enjoy your life and build a retirement future that does not rely solely on the sale of your practice.
Dental: Choosing the Right Banker
When was the last time you thought about whether or not the dental banker you have, is the right banker?
I am a former banker of 34 years. I have worked with healthcare practices, primarily privately owned dental practices, for the last 14 years of my career. One of the many things I learned during this time is bankers are perceived to be a dime a dozen. For the most part that is probably true. But there are many fine banks and bankers out there that are true consultants to their clients. They provide analysis and advice to improve efficiencies that will impact the bottom line of their clients.
The RIGHT banker
Practice owners pay CPA’s, bookkeepers and attorneys for their time. Perhaps that is why they are more likely to take their call than their banker’s call. Banks do not charge for their time and maybe that is why they are deemed less important or not a true advisor.
I can assure you that the right bank and banker can provide you with much insight and value if given the time to understand your practice. Yes, there are products and services that have monthly fees. The right banker will recommend the product or service that will decrease risk of fraud and provide front office efficiencies. The cost will more than pay for itself in reduced time performing daily tasks, allowing for a more productive use of time, and reduced risk of fraud which impacts three out of five dental practices.
Every dental practice owner should have a banker that:
- Knows your industry and banks many other professionals like you
- Provides consistent and timely (quarterly, semi-annual or annual) reviews of your account relationship which includes any changes in your practice, checking account activity, liquidity position, merchant provider activity and financial changes in your business and personal life. This conversation should also include short term and longterm plans or objectives for you.
- Has products/services designed with you in mind. There are a few banks in the nation that have a division within their institution that works solely with dental practices. These banks have designated bankers and products/services designed to help you the owner prevent fraud and be more efficient in your front office procedures.
If you do not currently have a relationship with your banker that provides the above level of service or value it is time to shop bankers or banks. I know how difficult it is to switch banks but the effort will be worth it if you receive the value you deserve and have a right to expect.