Would my practice be eligible for federal loans offered by the Small Business Administration (SBA)?
Yes, Virginia has been declared a statewide disaster area (https://disasterloan.sba.gov/ela/Declarations/DeclarationDetails?declNumber=6063685&direct=false).
As such, low-interest federal disaster loans will be available for working capital if a small business is suffering substantial economic injury as a result of COVID-19. These loans offer up to $2 million in assistance and may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.
What is Virginia doing to assist employers at this time that need to reduce staff or cease all regular business operations?
Employers who have to reduce operations or cease regular business activities will not be penalized financially if more workers request unemployment benefits. Governor Northam is also working to offer funding for employers through the Workforce Innovation and Opportunity Act (https://www.virginia.gov/coronavirus-updates/).
Would another option be to get a loan from my financial institution?
Yes, working with a banking partner with whom you already have an established relationship is an excellent option to consider. Often, this may be a more efficient option that allows relatively quick access to needed capital. Some financial institutions are waiving penalties and fees for things like emergency CD withdrawals, so it's best to reach out and inquire about what would be best for your situation.
Because interest rates are low, would a credit card be something to consider?
Low-interest or even zero-interest credit cards may be available and could be a good choice during this unpredictable season. You also may want to consider making minimum payments or even restructuring existing lines of credit to take advantage of the lower interest rate environment.
Are there options if my practice needs to skip payments?
The best recommendation is for you to contact vendors and financial partners directly — and proactively — to make requests. Since skipping a payment without making prior arrangements can have a negative impact on your credit, it’s encouraged that you reach out in advance of missing any payments. You could potentially negotiate terms that include requesting a pause on payments, making interest-only payments or pausing automatic payments.
Do you have suggestions for other ways my practice can access funds during this time of uncertainty?
We suggest continuing to manage your receivables and collect them from patients and insurance companies even during the pandemic to bring in payments for services that have been rendered.
*Notice: The information contained in this Q&A is not intended to constitute legal advice and should not be relied upon in lieu of consultation with appropriate legal advisors. Consult the advice of an attorney for any specific legal question. Also, as the laws and guidance surrounding these issues are changing daily, the information provided above is only current as of the day written.