COVID-19: Finding Capital Now & Where to Invest It
In the midst of the current crisis, dentists are looking for ways to open up more cash flow to take care of their staff and practice. Adam Zilko, Firegang Founder & CEO, sat down with Mike White and Eddie Geraghty of CLA Connect to share insight and advice on where dentists can find capital right now. CLA Connect helps over 7500 dental practices nationwide with wealth advisory, accounting, taxes, and financial consulting.
Click below to watch the full interview.
If you have further questions for Mike and Eddie, you can contact them by clicking here.
Paid Leave & Payroll Credits
On top of the newly passed CARES Act to help cover payroll, Mike and Eddie shared that dentists should also be aware of the emergency family leave act, which helps employees that are unfortunate enough to either have the virus themselves or have a family member they have to care for due to the virus. In these instances, that employee must be given paid leave, up to a maximum of $511. In return, the government will fund this through a payroll credit. Let’s say your payroll taxes for that week totaled $200, and you paid that employee $100 for leave, it will go against your payroll taxes, so you only have to pay the balance of $100. If multiple employees have to take this leave, and your leave pay outweighs your payroll taxes for that month, the surplus turns into a refundable tax credit.
Finding Capital Now
To find capital right now, Mike White advises you to begin with your existing lenders and have conversations with your bank immediately. Most of the big banks have already put together a program to offer loans to dentists that are interest-only for 90 days. With these loans, you would only pay the interest for 3 months, which buys you time to use that loan to market your practice and stack those appointments to generate revenue before your first loan payment.
The next step is to have conversations with your landlord if you rent your office space, or, if you own your practice building, talk to your banks about your mortgage payments. These conversations should focus on getting time on your side before having to pay your rent or mortgage so that cash opens up to grow your practice.
Finally, speak with your suppliers and vendors and have an honest conversation about them. Take a look at your P&L statement (if you work with a company like CLA Connect, you should receive a P&L statement every month) to identify the least important expenses so you can delay or renegotiate those payments. For the necessary expenses, try to get a delay of payment to buy yourself time and open that money up for your practice. Let’s say you have a 12-month contract for something, your lease for example, if you can pause that payment for 3 months, have those 3 months added onto the back end of the lease, extending to a 15-month contract.
If you’d like to get a clear action plan on how to protect and grow your practice right now, join our Masterclass tomorrow,
April 9th, Build Your Foundation: How to Generate Revenue Today & Position Your Practice for Future Success.
Start the SBA Loan Process
Even if you are hesitant to use an SBA, Mike and Eddie recommend starting the process. It’s uncertain how long dentists will have to wait for an SBA loan or any subsidies from The CARES Act. It’s better to be the first in line so your office has options than to wait weeks for federal subsidies. Tip: the SBA website is overloaded at this point, so try to access the site early in the morning or late at night.
Where to Invest Your Money
Mike and Eddie recommend using this capital to push media and marketing out to the public. Your patients want to hear from you and it’s the only option to stack appointments onto your schedule. Personalize your marketing to show what your team is doing with this time, and showcase your availability and contact information.
Additionally, dentists should consider:
- Expanding your schedule: if you’re a 4 day/week practice, move to 6 days
- Contemplate offering dental membership plans: patients may come out of this without insurance due to layoffs
- Expand your hours: this helps your patients and gives your employees overtime opportunities
From an investment standpoint, using your marketing to communicate to patients and book appointments for May or June is the best opportunity to come out ahead. If your practice needs marketing help or support at this time, schedule a call with us by clicking below.