Insights From Our Editors

COVID-19 Relief Package: What the SBA Rules Mean to Getting a Loan

By Mark Wright, OD, FCOVD,
and Carole Burns, OD, FCOVD

April 8, 2020

The Small Business Administration has rules impacting who will receive the funds available through the CARES Act. Here is what you need to know to access those funds.

The two questions we hear from doctors this week are: should I participate in the government loans that will be forgiven and should I do it now or wait? Let’s take these on one at a time.

The “free” money comes in two different governmental loans that promise if you use them correctly the total amount may be forgiven. We created a chart to help you understand the difference in loans that are out there right now.

If you apply for and receive the Economic Injury Disaster Loan (EIDL) Emergency Advance you can receive up to $10,000. There are no rules on how you spend this money. If you also apply for the CARES Act Paycheck Protection Program (PPP) you could receive up to 2.5 times one month of your payroll minus the amount of money you receive from the EIDL. There are very specific rules on how you spend the PPP money. You can find the specific rules for these two programs as well as the application forms at the following web sites:



The AOA as well as many other groups have published webinars explaining the programs in depth. The AOA webinar can be found HERE.

The second question is when should I apply? The ideal answer would be eight weeks before the program ends, when there is still money left in the program, and just as your practice is reopening. The most important phrase in the previous sentence is “… when there is still money left in the program.” We think the $350 billion will go pretty quickly. And once the money is gone, it is gone. If you wait, you run the risk of applying and there is no more money for you because others, who applied earlier, took all the money. President Trump said he is willing to consider another round of money, but that is not a sure thing. The sure thing is the money that is in the PPP right now.

You should also realize that most banks are choosing to only accept applications from people who currently have an ongoing relationship with the bank. Taking out a loan 10 years ago and paying it off is not the same as having your current checking and savings accounts (both business and personal) with a bank. You should also realize that banks do not have unlimited funds. And when each bank’s funds available to use for these loans runs out, then there is no more money from that bank. You would need to try another bank.

These are difficult decisions for you to make, yet this is an opportunity to have governmental help getting through this pandemic and to get your practice in a better position to move forward after this pandemic has passed.

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