EPISODE 45 TRANSCRIPTION
Announcer:
Hello, everyone. Welcome to the Millionaire Dentist podcast, brought to you by Four Quadrants Advisory. On this podcast, we break down the world of dentistry, finances and business practices to help you become the millionaire dentist you deserve to be. Please be advised, we do speak with an honest tongue and may not be safe for work.
Casey Hiers:
Hello, and welcome. This is Casey Hiers, and we're joined today in studio with Steve Levy and Colt Smith. Guys, thank you for joining us.
Colt Smith:
Thanks for having us.
Steve Levy:
Thanks, Casey.
Casey Hiers:
I wanted to have you in because earlier this month, the HHS announced a new phase... I believe it's Phase 3... for its general distribution, which allows providers, including dental service providers, to apply for additional funding through the Provider Relief Fund Application. This is something that's time-sensitive; there's a due date. This is probably more of a public service announcement to our listeners, but I wanted to bring you guys in and just touch on this a little bit. When is this deadline?
Steve Levy:
So the deadline for this application is November 6th, so it's coming up. The HHS is encouraging people to apply early so that they can get their funds early on this new money, free money.
Casey Hiers:
Is this a loan or is this money that's available if you apply for it and qualify?
Steve Levy:
Money that's available if you apply. It does not need to be paid back. This is similar to earlier application, maybe one or two months earlier, that people that applied received a payment of 2% of their revenues. This is on top of that. Plus, if you haven't applied for the 2% of revenue money, they will roll it into this application, so you still have another chance to get it.
Casey Hiers:
It's kind of like The Mulligan. If you miss that first one, you can roll it into this one. Okay.
Steve Levy:
Exactly.
Casey Hiers:
Okay. Now, I know that a lot of firms out there, they are charging for this information. This is part of our flat fee. Our clients get this all day every day, but I just wanted you to dive into the nuts and bolts of this, maybe share where they need to go and really just help our listeners here with something.
Steve Levy:
So it's really one of the simpler applications that I've seen the government and especially HHS put out. So really what they're wanting is basic information, their tax identification number, and what that does is allow them to match up that you are a dental provider, which is really the first hurdle to overcome this, and then they want to make sure that you've filed your tax returns, and then they'll compare your quarter one and quarter two revenue and expenses from 2019 to quarter one and quarter two for 2020 to see if there is an effect by COVID on these numbers. Of course is the case that especially quarter two 2020, there is a reduction in what it was in quarter two of 2019. So what this is trying to do is do an add-on payment that considers your change in operating revenues and expenses due to COVID, which we don't know of too many that weren't affected both on the revenue and expense side from COVID.
Casey Hiers:
Well, and again, to our listeners, we have clients who are talking to their friends about it on the golf course, and they were fellow practice owners and they didn't know anything about this. There wasn't any proactive advice. So again, for us and our listeners, we just wanted to share with you an opportunity that's time sensitive to potentially get some more revenue that's available. I always feel badly for those folks that don't hear about it. Obviously, if they didn't hear about it the first time, they're nice enough to allow you to recoup that this time, but you can never plan for that. Now, this begs the question, and this is just me taking it to the PPP, but I know that there's some forgiveness or some repayments that need to be done. That was a hot topic earlier this year, but what can you guys tell us about that?
Steve Levy:
Well, most every business, whatever kind it was, applied for these PPP funds.
Casey Hiers:
That's a loan. That's not just money like we're talking about with the other. This is a loan that needs paid back.
Steve Levy:
That's right. This needs to be paid back. Now, it's time to apply for the loan to be forgiven because you were given 24 weeks to go ahead and spend the funds. At first, they said you've got a short window of eight weeks that really was really too small to spend the money, plus the timing wasn't great for a lot of businesses to spend the money in that eight weeks when they really weren't fully operating. So they expanded that, thankfully, to 24 weeks, and a lot of businesses are crossing over that 24-week period now where, "Okay, I've got the data. I've got what I've spent to be able to go to the bank and say, 'All right, here's another application that allows me to say, 'I am forgiven of this loan. I don't have to pay it back,'" which is a great thing, obviously.
Casey Hiers:
What happens if somebody, if this slips their mind, if they don't complete these forms for the PPP forgiveness or they're just overwhelmed right now with a variety of factors?
Steve Levy:
Right. Now, they do give a good amount of time for this forgiveness application. They'll give really up to six months to go ahead and put this in, but if they totally forget or it slips their mind, it becomes a loan that they will have to pay back, which is unfortunate because a lot of it could be forgiven. Typically, we'll see close to a hundred percent of the loan to be forgiven. Now, there is an aspect for taxes, getting back to taxes, on what it means when this is forgiven. It means that the amount that is forgiven, you have to treat that as a non-deductible expense. So, essentially, that forgiven amount will boost up your taxable income. So that is a factor, but it's still better to have to pay back the loan than not, we think.
Casey Hiers:
Of course. Yes, Colt?
Colt Smith:
Yeah, so I'm glad Steve brought that up because it's very important that you are in communication with your financial team because there are some tax effects that these are going to have. If it's the PPP, it might be forgiven, but, yes, those expenses you use with the PPP are non-deductible. When it comes to the HHS, it's "free money," but it is taxable money. So there's going to have some sort of tax effect on your situation that your accountants need to know about when they're doing your quarterly estimates, when they're doing your tax return so you don't get a huge surprise come April when they file your return.
Casey Hiers:
For any of our listeners out there who maybe wish they were a financial wall street financier or some sort of a high level accountant, a lot of practice owners are getting to cut their teeth with this because they're not getting a ton of proactive advice, and they are needing to do the research and find the links and have the timelines and all those things. I'll just call this a shameless plug, but at Four Quadrants, our clients receive the data. This is what's available. This is the timeframe. Here are the links. Here are your profit and loss statements and balance sheets and financials that you may need for this page and that page. We give them a blueprint and a roadmap. But for those folks that don't have a firm like that, they could miss out on it or they didn't have to proactively find it themselves. So we always say challenge your accountants and financial planners and all of your folks like that to be on top of this so you don't have to.
Colt Smith:
I'll even go a step further. Most banks are allowing their advisors to go ahead and do the application for them, and all they have to do is sign a document and they're done. So we will be doing it for you. All you have to do is sign on the dotted line and you're done. So we're even doing that for you, all the process.
Casey Hiers:
Well, guys, I appreciate you sitting down just real quick with this. Again, a time sensitive podcast, really good information for our listeners. There's just a lot going on right now, and we just wanted to send out a public service announcement, really, for the forgiveness for the PPP. Now's the time, and there's Phase 3 Cares Act Provider Relief Fund. These are vitally important to our practice owners. We hope this everybody out there. Thanks and be well.
Announcer:
That's all the time we have today. Thank you to our guests for their insight and for sharing some really great information. And thank you to you, the listener, for tuning in. The Millionaire Dentist podcast is brought to you by Four Quadrants Advisory. To see if they might be a good fit for you and your practice, go on over to fourquadrantsadvisory.com and see why year after year, they retain over 95% of their clients. Thank you again for joining us and we'll see you next time.
