The recently enacted Coronavirus Aid, Relief and Economic Security (CARES) Act established or expanded several loan programs intended to provide liquidity to businesses including physician practices. These provisions include:
- The Paycheck Protection Act (PPP) for small businesses (PDF) which authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. Loan amounts will be forgiven so long as proceeds are used to cover payroll costs, mortgage interest, rent and utility costs over the eight-week period after the loan is made and employee compensation levels are maintained. Payroll costs are capped at $100,000 on an annualized basis for each employee.
- The Coronavirus Economic Stabilization Act (CESA) authorizes the Secretary of the Treasury to make loans, loan guarantees, other investments and subsidies to provide liquidity for mid-sized businesses between 500 and 10,000 employees for losses incurred as a result of COVID-19. These loans will have an annualized rate no greater than 2% with no principal or interest due for at least six months, but these loans will not be eligible for forgiveness.
- Economic Injury Disaster Loans (EIDL) are available to physician practices with no more than 500 employees. EIDLs are lower interest loans of up to $2 million with principal and interest deferment available for up to four years. They can be used to pay for expenses that could have been met had the disaster not occurred, including payroll and operating expenses.
- Small Business Debt Relief Program will provide immediate debt relief to small businesses with non-disaster Small Business Administration (SBA) loans. SBA will cover all loan payments on these loans including principal, interest and fees for six months. New borrowers are eligible for this relief if they take out loans within six months of the President signing the law. More information on how to apply for a small business loan is available on the SBA's Coronavirus (COVID-19): Small Business Guidance & Loan Resources website and at the U.S. Department of Treasury's website.
The Borrower Application Form for the new small business loan program is available and small businesses and sole proprietors can begin applying. Physicians can also contact their local SBA District Office.
- Apply for an SBA loan (PDF)
- View the interim Final Rule (PDF)
- View the Treasury FAQ (PDF)
- Contact your local SBA district office
Find more information on the loans and other financial assistance available for physician practices.
Additional resources on the CARES Act
Access a full suite of AMA resources on additional provisions in the CARES Act:
- Overview summary of the CARES Act
- Medicare advance payments overview and FAQ
- Telehealth fact sheet and quick-start guide
- Liability protections
- Centers for Medicare & Medicaid Services (CMS) payment policies and regulatory flexibilities
- Operational and strategic resources for physician practices