Administration and Leadership, Coronavirus, Exclusives

EMS LawLine: Paycheck Protection Program Still Has Money Left – But Hurry, Deadline is June 30

Steve Wirth, Esq., EMT-P

Update: On Saturday July 4, 2020, President Trump signed a new law extending the deadline for applying for a Paycheck Protection Program (PPP) loan from June 30 to August 8.  

There is reportedly over $100 billion dollars of funding up for grabs in the CARES Act Paycheck Protection Program (PPP) which can provide forgivable federal loans for many ambulance services and EMS agencies. The clock is ticking as the deadline to apply is June 30.

Small businesses (most for-profit, non-profit, and many hospital-based ambulance services) with less than 500 employees are eligible if they agree to use the funds for essential purposes such as payroll, rent, mortgage payments, interest and utilities. The loans can be completely forgiven if the recipients maintain staffing and payroll levels during the pandemic. If a loan recipient does not maintain employment levels, or if wages decrease, then the level of forgiveness is reduced.

More EMS Lawline Reading

The PPP’s initial rollout was a mess. Since then, many of the initial application problems have been cleared up and recent changes have made loan forgiveness more lenient. The program was initially funded at $349 billion when the CARES Act was enacted in March. But it quickly ran out of money – within 10 days – and many banks simply were not ready to process applications.  

Congress infused an extra $320 billion into the program, which brought the total amount of available PPP funds up to a staggering $669 billion. Many ambulance services took advantage of the program, and surprisingly, there are still funds available for those eligible who did not.

Find a Good Bank

The key is to get to a bank approved by the Small Business Administration that has expertise in processing the loan applications. Many smaller banks geared up quickly as some larger banks faltered. The smaller, more nimble banks saw the financial opportunity for them since the bank receives an “origination fee” of 5% on the typical loan amount straight from the federal government.

Recently, the SBA released a free online tool that helps companies find a PPP lender. The tool called “Lender Match” connects small businesses to smaller banks and Community Development Financial Institutions that can also help with other small business loan programs.

Paycheck Protection Program Flexibility Act

Enacted June 5, the Payroll Protection Program Flexibility Act of 2020 gave borrowers more leeway in attempting to gain forgiveness on their PPP loans.

The amendments provided several added benefits. Among the key additions to the PPP is that it extended the loan forgiveness covered period from eight to 24 weeks – giving recipients more time to bring back laid off employees. It also relaxed restrictions on the portion of loan proceeds that must be used for payroll costs to get that full loan forgiveness. It dropped the percentage from 75% to 60% – so now recipients need only spend 60% of the funds on payroll costs for the loan to be entirely forgiven. The maturity of the PPP loan portion not forgiven (which is set at a very favorable 1% interest rate) also increased from two years to five years.

The PPP program, if handled properly, is essentially a gift from the federal government. For many ambulance services, it can help stabilize the finances during the pandemic, where in many cases operating expenses have soared, and call volumes have gone down drastically. But hurry, you only have a few more days to apply!

For more information on the CARES Act, the PPP, EMS documentation, coding, waivers, and all things COVID-19 go to PWW’s Corona Update webpage.