PPP Loan Forgiveness: New Timeline Means a Change in Strategy

Under the CARES Act legislation, the program was originally designed to spread out targeted loan benefits over an eight-week period. But under the Paycheck Protection Program Flexibility Act of 2020, this period was extended to 24 weeks.

The goal for PPP borrowers is not only to fully utilize these funds, but also to maximize the loan forgiveness feature of this program. With the Paycheck Protection Program Flexibility Act, dentists can further focus their strategy from maximizing loan forgiveness to achieving 100% loan forgiveness.

So how does this work? Recall that the main components of the PPP loan calculation were doctor and staff payroll expense. Specifically, the applicant submitted 10 weeks’ worth of payroll expenses to justify the majority of funds borrowed. Moreover, U.S. Small Business Administration regulations identified staff payroll expenses as counting dollar-for-dollar toward the loan forgiveness amount. Expanding the expense-tracking period from eight weeks to 24 weeks means that most PPP loan borrowers likely will be able to pay staff compensation well in excess of the loan amount.

If you’re interested in a comprehensive planning approach customized to you and designed to enhance your overall financial well-being, the practice integration advisors at Buckingham can help.

Would you like us to speak to your study club? Our Practice Integration Wealth Management team is pleased to offer live, interactive presentations to your colleagues. We can tailor our presentations to fit your content and time requirements and deliver them via an online format. Along with a question-and-answer period, we offer all attendees the opportunity to meet with us individually should they wish to ask questions more specific to their own circumstances. We can also arrange to have your study club’s presentation earn ADA CERP credits for attendees. Contact me for more information.

Buckingham Strategic Wealth is an ADA CERP Recognized Provider. ADA CERP is a service of the American Dental Association to assist dental professionals in identifying quality providers of continuing dental education. ADA CERP does not approve or endorse individual courses or instructors, nor does it imply acceptance of credit hours by boards of dentistry. IRN-20-934