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Loans, Budgets and Comeback Strategies for Dentists

Dentists have learned a lot of acronyms in the past few weeks including PPP and EIDL.

To help sort through all the different loan programs, budgeting tips and comeback strategies for dentists, Mike White of CLA talked to Patient Prism CEO Amol Nirgudkar. Mike is a CPA and a Principal, Health Care at CLA and specializes in working with independent dentists and DSOs.

Below is a quick synopsis of the conversation. For deeper analysis, please view the video.

Loans for Dentists

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (CARES) went into effect.

It included loan components that small business owners including dentists could apply for.

SBA Economic Injury Disaster Loan program (EIDL)

  • Waived personal guarantees on loans under $200,000
  • Waved the “unable to obtain credit elsewhere” provisions
  • Very few businesses got more than $25,000 approved

Paycheck Protection Program (PPP)

  • Offered loans for businesses to maintain payroll and related benefits
  • 100% forgivable if showed the money went to payroll and approved expenses within eight weeks of disbursement
  • Unused portion becomes a low-interest, two-year loan
  • All $350 billion in funding was allocated by April 15, 2020

Lines of Credit

If you have a line of credit that’s already approved through a bank, this might be a good time to draw down the entire amount and keep it as cash on hand, said Amol Nirgudkar, who was a dental CPA for years before launching Patient Prism. Another option to access cash is to take a home equity loan.

In the video, Mike White and Amol Nirgudkar discuss the benefits and drawbacks of each type of loan.

Dental Practice Budgets for Different Scenarios

CLA uses business intelligence products to power their analysis and plan for different budgets based on revenue projections.

“Dental practices are going to be reopening at different times,” said White. “Some states may open in May, while others don’t open until sometime in June. Plus, the number of patients that can be seen may be different than it was before.”

One of the huge unknowns is the impact COVID-19 will have on dental patient scheduling. For example, orthodontic offices with open bays and multiple chairs will need to consider social distancing between patients. Every dental practice owner will need to consider waiting room protocols and factor in extra time to sterilize patient areas even more thoroughly than the normal universal precautions.

“When we start seeing patients again, we may not be at 100% capacity. We’re going to have expenses immediately, but our cash won’t come back for another month or so. That’s going to impact who you hire back and how quickly. Doctors might be doing hygiene for a while, depending on the schedule,” explained White.

Mike White suggests dentists work with their CPAs to plan for different scenarios. Start by looking at your lines of cash, credit, and loan money and then determine revenue and expenses based on doing 25% of normal production, 50%, 75% and 100%.

Comeback Strategies for Dental Practices

Dentists need to have a plan, said White.

“Are we going to be expanding our schedule? Are we going to expand the number of associates we have? Do we have payment options for people who may have lost their dental insurance? Who’s working the schedule to get patients back? These are some of the questions that need to be answered,” said White.

Besides scheduling and staffing considerations, dentists need to start planning for supplies. Dentists will need Personal Protective Equipment (PPE) and cleaning supplies to ensure the safety of their team members and patients. Since there is a shortage of both, now is the time to start ordering and figuring out the supply chain issues.

Additional Resources

CLA has a series of COVID-19 resources available on its website at claconnect.com/COVID19.

For more interviews with experts, training resources, and guides, visit Academy.PatientPrism.com.

There will be a huge need for dentistry once people can resume normal activities. More people than ever will have questions about safety, affordable treatment options, and what’s covered by their insurance plans post-COVID. Visit PatientPrism.com/Overview to find out how we can help your team convert more callers into booked appointments.

About this Industry Leader:

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Mike White

CPA & Principal, Health Care, CLA

Mike White is an experienced principal with a demonstrated history of working within the healthcare industry, specifically with independent dental practices and dental support organizations (DSOs). Mike is one of the national leaders for CLA specializing in the dental and DSO BizOps (accounting and CFO) services. 

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