Despite the immediate need for economic relief many businesses feel, the rollout of the promised Payroll Protection Program (PPP) loans has been far from smooth. Funding for the initial PPP loans tapped out quickly as millions of businesses and individuals applied right away. Among countless other small businesses, orthodontic practices are scrambling to figure out how to receive emergency relief funds while keeping their office afloat.
Even with the rough rollout of PPP loans, orthodontic practices still have viable options to turn to, including a second PPP loan application. Another program to look into is an Economic Injury Disaster Loan (EIDL). Manon Newell explores these programs while offering tips on how to secure funds for their practice during the current crisis.
- Learn whether you qualify for the new PPP loan
- Discover how the Department of Treasury's Code of Regulation can assist you in having a better understanding of the loans
- Understand the process of filing for the EIDL loan if you are unable to access the PPP loan
Richie Guerzon: Hey everyone. We're very excited to have Manon back for a part three on the state of the PPP loan situation. For those of you who don't know, Manon serves as partner and CEO of Engaged Practice Growth Specialists, a firm that helps doctors build engaged high performing teams that ultimately increases their profitability. She has a Juris doctorate law degree from the University of Dayton and a bachelor's degree in history with a minor in financial accounting for Miami University in Ohio. In her day-to-day responsibilities Manon is often tasked with handling practice’s financial analysis, which makes her our resident expert on all things PPP loan and welcome back to the show.
Manon Newell: Thank you. Here we go again.
Richie Guerzon: So, this has been an adventurous ride.
Manon Newell: Welcome to another episode of is this still happening? It is.
Richie Guerzon: One day I'll be doing my grandkids about all this.
Manon Newell: We were talking about the PPP loan several weeks ago when this first started and I think unfortunately, we're kind of all at the mercy of the timing of the government and our individual lending institutions and trying to, I know all of my clients are, have been really struggling with when do we apply for the loan and if they applied then the next question is did it get approved? In some cases, with larger Banks people don't even know if their application was accepted or approved.
Richie Guerzon: Yes, absolutely there, we are dealing with that with Wells Fargo. It's kind of in this weird limbo.
Manon Newell: Yeah, exactly and I've heard that about most of the big banks. Some of our clients that have smaller local banks received both EIDL loan funding the initial $10,000 Grant as well as at least notification that their PPP loan was accepted and will be disbursed and they were given a time frame.
Richie Guerzon: I know I've always been about having big banks with my business, but I seriously think I'm going to do a good tour of Charleston local banks now because I have not been happy with the experience.
Manon Newell: We feel the same way and I think that the big banks I think you know, everybody has probably read by now and understands that businesses that we wouldn't consider to be like businesses that you and I and our clients wouldn't consider to be small businesses have figured out loop-holes and ways to apply for multi-million dollar loans under this program. And so, the funding was tapped out almost as soon as you know, as soon as it was available, and I think also everyone knew from the beginning that that was going to happen, you know people in the government people outside of the government were saying we're going to need additional funding for this program, which is why I understood I definitely understood the pressure that you know, our clients were under which is trying to figure out how to time this appropriately and that's really difficult because there are lots of moving parts here, you know, you have the ADA which is issuing guidelines. Then you have your state Dental societies which are you know, having a little more Direction in terms of when doctors can reopen and what that's going to look like in terms of you know, how many employees, how many patients can you see, what other kinds of restrictions might be in place and for how long and then trying to time all of that with the disbursement of these loans because nobody wants to bring their staff back off of unemployment, you know, if they're not open. That doesn't really make sense and it's kind of doesn't it's not really the purpose of the law. I mean the purpose of the law is to be able to pay people and for people to stay employed. So as long as they're at home, it makes more sense for the business for them to be taking their unemployment. So, I really sympathize with everyone in terms of the timing of this and how to try to you know, strategically put all those please pieces into place and then you're also in that situation where you feel this pressure like hurry up and apply the money is running out like the money ran out before it started.
Richie Guerzon: At least I expected that to happen and feel confident they're going to do something about it.
Manon Newell: I mean, you know, I assumed it maybe I'm too optimistic when it comes to the government, but I felt like this was a situation where the government's hands are tied. I mean unless you want a full economic crash, you know, like another Great Depression. They're going to have to continue to you know, infuse the economy with different kinds of stimulus and small businesses make up a huge percentage of our economy. So absolutely the government really has no choice. I mean they have to keep funding this and I wouldn't be surprised if we see this funding again.
Richie Guerzon: So, they are highly incentivized to do this as well. You got to keep everything going and keep spending if we're not doing that then what happens exactly.
Manon Newell: It’s only been like a month since we were talking about this. Now we're on to part 3 and more funding for the SBA Loans. I think that in another month or two, we're going to see more. For me from the beginning and I think in our kind of industry the big CPA firms were sort of at odds about this from the beginning and I kind of you know, I was listening to Kane Waters a lot and I feel like I was in agreement with them from the beginning which was you know, their advice I thought was Sage which was to wait because we probably are going to see more funding and number two was like if you got this funding before your employees are back to work, what are you going to do with that? I mean because 75% has to be spent on payroll. So, that leaves you only with a couple of options which would be to bring all the employees back and start paying them but back virtually so you're bringing them back on to payroll just to pay them but then when you reopen now payroll is on you and the whole purpose would be to sort of you know, soften the blow of reopening when starts are probably going to be down, you know production overall is going to be down this year. No matter how you cut it. And so, to have that two months of payroll covered for you actually is hugely beneficial to all of our clients. I mean, I think it's really going to soften the blow of you know, the other fallout that we're going to see from the from the virus. So, that advice to wait I thought was good advice because now we see that this additional funding is coming. I would assume by the end of the week that will see the money becoming available through the SBA. It was just passed yesterday by the Senate. So, I think by the end of the week, we should see that signed into law and I think it'll be exactly like the last time there will be this huge rush on the banks. And so, that's kind of a strategic part of the strategic plan that everyone needs to think about. If I had applied for this loan and hadn't been approved or didn't know even if my bank received the documents. It's something that I mean sadly, I've heard that repeatedly have you heard this?
Richie Guerzon: I've experienced a little bit of it, but I haven't heard of it from our clients. But uh, we have it right now. We've applied to Wells Fargo and then as soon as PayPal started we did it through there and actually PayPal's at least communicating with us.
Manon Newell: PayPal is doing the PPP loans?
Richie Guerzon: Yeah, so we have applied for it like a few days after they were approved to do it.
Manon Newell: And you heard back from them?
Richie Guerzon: Oh, yeah. Well first I thought we did it. I applied then I checked the system the next day and it said there was no record of any application. So, I was like, oh great. That was a big waste of time and then later that day. We got an email that said “Thank you for submitting an application and you're in a pending status”. And then they told us a few days ago that funding has run out, but you're still processing your loan with anticipation that it is going to work. Moving forward even during this weird time.
Manon Newell: That leads me to my next point which is you know, some banks are going to keep the application that you have hopefully on file with them if you applied after the initial funding, and some banks are not keeping those and it will be an entirely new process and the only way to find out is going to be to get in contact with someone at your bank.
Richie Guerzon: Which that'll be easy.
Manon Newell: Yeah. Yeah, just pick up the phone and call. But that's been an issue that everyone has had as well is actually getting a warm body on the phone that has any decision-making capability at all. So, those are kind of the steps that I would encourage everyone to do today would be if you apply during the initial then contact your bank make sure that your application is still in file or find out if you need to do an entirely new application. The other thing that you need to do is if you didn't apply and you were waiting which I think was probably smart if you were waiting to apply I would have all of your ducks in a row right now because it looks like the last time that it happened you know within probably 24 hours; the money was gone. It's a little less than double what was there for the original PPP loan. There's an additional three hundred and ten billion. I think the first one was like three hundred and forty three hundred twenty something like that. So, it's almost double but what that tells me is that it's going to be a really similar process. So probably, you know, I would say 24 to 48 hours after they make the announcement that the SBA is releasing the funds and that Banks can now process the applications. I think they'll be saying we ran out of money within a couple of days. But I would still say this situation that we're in is not going away. I'm going to kind of relate it to a little personal note, take a little kind of detour for a minute. I'm in a group of moms. We were all planning our son’s senior graduation party. There are like six of them and they've been best friends since middle school and it's interesting because this group of moms, you know, they kind of text every day and the questions they're not really about like what's going to happen in the fall or what's going to happen next winter or this time next year but “Do you think we could postpone the graduation party that's supposed to be in May by a couple of weeks?” I feel like the Debbie Downer on this text threads. I don't want to say I don't think there's going to be a graduation party. Or maybe we should be talking to our kids about the fact that they might be going to virtual college for a while like. I like to be a realist and I look at things, you know, I'd always rather be surprised by good news anyway, then you know the other way around. If somebody in September says, oh my God, we fast-tracked a vaccine great. That's awesome. But until then I would prepare for you know, the very real possibility that this is going to be part of our working lives in our personal lives or you know, the foreseeable future probably the next 18 months, 24 months. And so, what is that mean.
Richie Guerzon: That's such a scary thought 18 months to 24 months.
Manon Newell: It is a scary thought but I was encouraging these moms in my text thread I said, you know, I mean, we all kind of operate differently. So, like I guess emotionally and mentally if it works better for you to take it one day at a time and say like we're going to postpone this party until the first week of June and then the first week of June comes and now we say July and we just continually keep pushing things. Yeah, you know, I would rather for me it's easier for me to say yes, it's most likely not going to happen. If something changes that great and if not, you know, then at least I had mentally prepared. I think it's good to kind of always be stretching in the direction of like where things are probably going and then if something positive happens, you know that can change that up then we'll deal with that. In terms of you know the funds for this I do think that everyone will be opening in some sort of capacity. So, over the next month, I think right now strategically is a great time to apply for this. I also think that there will be opportunities for other SBA Loans, if not an extension of the PPP for a third time. Maybe there will be something similar something else. But I do think that this will continue as long as we're dealing with this situation. Yeah, so, you know because the PPP covers eight weeks of payroll. We're going to be working in some capacity over the rest of the year. So, you know to me it's kind of as long as it is short like when those eight weeks occur. So, I think applying for this round or if there is a next round, I think either of those are safe bets that you're going to get most of the loan forgiven because you should have employees back in some capacity over the next month or two. So, that was you know, my initial was just on that first round of funding even though they kind of terrified everyone into saying we need to take this loan right away, I think that there may be people that were lucky enough or unlucky enough to get approved for that loan that are now kind of like sitting on this money and they're either going to have to prepay it or they're going to have a loan at 1%.
Richie Guerzon: At least that’s not the worst-case scenario. If you went into it knowing that possibility, you have use for a one percent loan anyway, right?
Manon Newell: Right it is in but the only thing that I would say about is because the loan term itself is short it’s 18 months, you have a six months’ deferment but the interest such that it is does accrue during the six months. If you didn't have a large portion of that loan forgiven and most of my clients those loans are six-figure loans because of the payroll that they have that's a fairly sizable monthly payment, you know, like two to three thousand dollars a month maybe.
Richie Guerzon: And so, I don't need it, you would say to just prepay it, right? If you don't need it?
Manon Newell: I would probably prepay it because you are going to see production numbers drop a little bit. And so, if you're not using the loan for the purposes it's intended for then I would probably prepay those amounts so that you're not caring that unless you know, if you're cash-strapped you may have to tap into that and then as long as you know what that monthly payment is going to look like. It seems doable than you know, I would say that would be okay.
Richie Guerzon: You can probably do a hybrid of it too till there's more certainty as to what's going to happen. Like will you be maybe cash-strapped in a few months, right? I mean we're applying for it now, but we don't necessarily need it right now. Everyone is still paying the retainers we're working hard and doing it but it's sort of we're doing it just in case what's the next few months going to look like, we don't exactly.
Manon Newell: Right, nobody knows and that's also why I'm a fan of the EIDL loan and we have clients who have received the initial 10,000 from EIDL loan. And EIDl was another one maybe worse than the PPP in terms of you know, their website was not functioning, people spend a lot of time doing the applications and they never received any kind of you know, certification or notification anything from the SBA saying yes, you applied we have your application and like this is what to expect but then I have some clients that just received like the $10,000 direct deposited into their account and we're surprised by it.
Richie Guerzon: That’s interesting, it’s all over the map, right?
Manon Newell: It is all over the map. And even for the clients that have received the initial 10,000 on the EIDL. They still don't know what their actual EIDL loan amount is because the SBA determines it
Richie Guerzon: Oh, but they've gotten the $10,000 but they have no idea? Oh, that's weird.
Manon Newell: Yeah, they have no idea what their actual loan amount is. We know what the terms are but they don't know what the amount is. So, I think that could be you know, pretty variable. I still think if people can apply if they can apply and get approved for EIDL I think that that is the best long time strategy not knowing how long this is going to last because again the PPP assumes that this is only I mean you can actually even read it in like the interim the interim guidance, you know, they say that the impact of this will definitely be over like in a matter of months, and I think that's not true. And so there will be like additional rounds of this but the EIDL represents to me the best long-term stability because we don't know exactly what's going to happen.
Richie Guerzon: So, what criteria are they using to determine how much you get for the EIDL.
Manon Newell: I think that's a mystery. I don't think anybody really knows, you know, the only things that they're really saying about EIDL right now are you know? I will step that back a little bit. So historically when you filled out an application for idle it was because you were dealing with like a hurricane or an earthquake or some kind of natural disaster. Right? And so, you could pretty easily show like what your economic damage was because if your office was totally destroyed and you were not seeing any patients, you know, and you have some estimate like we're going to have your office rebuilt by such and such whatever the case maybe you could make a pretty good argument on paper for what your actual losses were going to be and I think EIDL was based on that. So, in this case, I know my doctors that have filled out the EIDL applications have looked at like what was their production, you know for the past 12 months. Yeah and try to project out, you know right now we know we've been closed for this many months. It's really speculation as to like how much this is going to impact the bottom line over the rest of the year. So, my guess is that they will have you know, the SBA will use some kind of formula and I think you're just going to get some kind of amount over that ten thousand dollars. And there is also the possibility that the 10,000, you know, the 10,000 you have to roll into your PPP if you get approved for PPP. That's a whole other element. But even if you the way the EIDL always worked was that if you requested the $10,000 emergency funds up front even if you end up not qualifying because the you know to qualify for the EIDL loan is a little more stringent than PPP. There's nothing to qualify you except to say that I had a legitimate business entity that meets these guidelines as of February 15th of this year, and I can show this amount of payroll got so the bar is pretty low for the PPP. I think EIDL is a little more in depth, I don't know. I just know that you could get the 10,000 dollars and then they may not approve you for anything else. And then that's the grant you know.
Richie Guerzon: But you got to win no matter what.
Manon Newell: Yeah, you kind of win no matter what I think everybody should be applying for EIDL regardless because even if I mean if you applied and even if you don't get in for the second round of funding for PPP, you know, you may get the 10,000 which is better than nothing and if it's not tied to your PPP, there really aren't a lot of strings attached to that 10,000. It's I mean literally just a grant. From the SBA so it's not as particular as the PPP where you have, you know, 25% is on qualifying expenses. 75% is on payroll and then you know, there are lots of other sort of qualifiers and I think that is also like a source of anxiety for everyone with these loans and it's sort of encouraging this kind of like we have to bring everyone back on payroll right away. Yeah you do. I mean as soon as those funds are dispersed. I will say one of the interim guidelines published by the Department of Treasury. This is something else I would recommend for everyone to do. I think you know, everyone should be going to the Department of Treasury website. Everyone should be looking at the code of federal regulations. There's nothing that says that you can't read those things and understand them, you know, because everyone's kind of like listening to everyone else's opinion about what this means like what are the SBA guidelines? And what is the Department of Treasury like what are these interim rules that they have? I would just encourage everyone to go and read those for themselves and take a little bit of responsibility in the sense that you know, you feel very familiar with what those rules and guidelines are I think it'll help inform how you spend the money, how you account for it. I know we talked about last time, but I think it's imperative that we have separate bank accounts for the PPP loan. If you get EIDL that should be another separate account you want to be able to very carefully follow the flow of that money so that when you go back for forgiveness, you know, the likelihood of you're getting it all forgiven or most of it is very high in that way. If you go to the Department of treasury's website it's actually chapter 13 of the code of federal regulations. Now, it's the it shows the temporary changes to the SBA loan program. They're calling it the interim final rule which sounds like an oxymoron. But really all that means is that in the interim there are changes to the way we are going to fund SBA Loans, gosh, interim guidelines. In rules that apply just to this SBA loan the PPP, but I don't know and you know, maybe everyone is not like me but I feel my overall anxiety is lowered when I have a good grasp of information. I talked to a couple of small bankers. One that lives in my neighborhood and one that is the lender for a friend of mine who owns a restaurant. In the very early days of the PPP and they were very upfront and saying you don't really know like the rules for forgiveness and we don't really know all of the rules that are going to qualify someone for this loan, which is why a lot of businesses got qualified that probably shouldn't have and RE now pledging to give the money back. But the Department of Treasury and the SBA actually say directly that it's not the lenders responsibility it's the borrower's responsibility to certify that they qualify for the loan.
Richie Guerzon: That's pretty eye-opening. It's not the lenders responsibility. I would have assumed.
Manon Newell: Right, but if you misuse the funds or if you applied and you weren't really qualified to receive them then, you know, you could be charged with fraud at some later point when the pandemic is over.
Richie Guerzon: I don't think any of us will have that problem, but it's good to know
Manon Newell: The point being just because you know, just because that is the case doesn't mean that you won't have a lender or some other person telling you, including me. I mean like, you know, you should just go read it for yourself and then feel comfortable about what you're doing is I guess, you know my ultimate guidance. I think it would take less than an hour to go to the SBA side of the Department of Treasury site and just go through that and most likely it's going to line up with what your advisors or consultants or CPA. It's probably going to line up with what they're telling you anyway, but I think at the at the end of the day you feel a little more secure about your own decision making you know when you have all the information at your fingertips.
Richie Guerzon: Absolutely that makes lot of sense. Why don't we put on your consultant hat? I have some clients that are opening next week. What should the first week look like for the team, you know as you're the doctor getting everyone ready, what would you suggest we do?
Manon Newell: Yeah, so I think you know for my clients that are planning to open next week or the week after I believe that their scheduling is going to dictate, you know, a lot of how this looks in combination with the guidelines coming from the ADA and their state and all societies. Yeah, you know if they're opening next week, then I imagine that they're putting patients into the schedule like this week. There's a lot of unknowns. I mean, we don't know how many parents are going to bring their kids in I think that's going to vary greatly depending on probably the part of the country that you're in. Yeah, you know people's various perceived levels of risk and what they you know, what they feel is an appropriate risk and what's not. I think that a lot of you know the state Dental societies and the ADA are making recommendations on how many patients you can have in the building at one time. If all the parents had no kind of qualms about bringing their kids in for appointments, we're still going to be restricted just by the guidelines. It's from the dental societies. So how many patients can we have in the office? One of the questions that I've had that I haven't seen answered is how many employees can we have in the office now? If we are under stay at home orders, and I know in Ohio I think that they're still saying ten people like any gathering that you should never have more than 10. So, does that apply in the workplace? I mean because it would be really easy to reach, you know, a number of 10 people when you take into account the doctor staff and patients. So I'm not sure that will apply but all of those things and all of the recommendations that we were making before this happened, I think those all are going to be back in place and then some so you know initially we were having the patient's family wait in the car. They would call when they get there when their area is sort of sterilized and ready for them than the office would text them that they come in.
Richie Guerzon: We've had at least two guests say they love that process and actually want to keep doing it forever because it's making everything so much more efficient.
Manon Newell: I think there will be people on both sides of that if I were the orthodontist, I would probably love it because I like it efficiency and pink and green line. I think there are other people who love having the families in the office and the siblings and they really enjoy the social aspect and that's kind of you know, what makes an ortho office what it is.
Richie Guerzon: That's how I think of it from a brand manager standpoint. I'm like great that's time you're building that relationship with them that's important time that we understand it from an efficiency standpoint, right?
Yeah. It's I mean, I think it's going to look very unusual for a while in
terms of how we see patients. We were asking the patients to come in to first wash their hands then we were asking them to brush their teeth and to use the peroxide based mouthwash. There were studies that show that that reduces viral load in the oral cavity using a hydrogen peroxide mouthwash. So, we still would be recommending that the patient would take their seat and I would assume that procedures that could be done by one person will be done by one person just to minimize exposure. There are some of course, you know procedures the doctor has to have an assistant for the doctor will have to check every patient obviously before they walk out the door. I think the in N-95 masks are obviously the highest level of protection and what I would recommend yeah which leads us to a whole other situation which is you know for those offices that are opening next week have they secured proper PPE.
Richie Guerzon: There’s going to be a shortage of it. You can't just assume you can order it overnight if there are shortages.
Manon Newell: Right, I would say, you know with the hospital's being on the front lines and needing all that PPE, I'm not sure. I do know that the legislation that went through yesterday is providing additional funding to hospitals and healthcare workers. I think in an attempt to alleviate this issue which is kind of crazy that we're even having that issue. I think you know, I believe that that's something that's being looked at and hopefully, you know won't be an issue for much longer for our clients. But I know in the beginning it is going to be an issue so that'll be another, you know, sort of strategy that they're going to have to come up with which is how much PPE do we have, what are we required to use? I know everybody wants to make sure they're protected their patients are protected and their employees are protected. And so, the schedule is obviously going to have to conform to that a bit too. Because in the beginning I would assume you might have more PPE in one week or one month, then you may be able to get the following week or the following month. I don't think that anybody is sitting on a stockpile of PPE right now. So, I think that's going to be a fluid situation that's going to depend so much on the supply chain here and you know where that takes us, but definitely there's beefed-up PPE and I haven't I'll probably be talking with clients of ours that are going to be opening in the next couple of weeks about that. The farthest I've gotten with anyone is that they've placed orders for those things that they know they need but I don't know if they've heard back that they can or can't receive it has been fulfilled yet. What about your clients, have you heard about now?
Richie Guerzon: We haven't addressed that specific issue with them. They haven't seemed concerned about it. But now that you're talking about it I think I'll ask them.
Manon Newell: Yeah, I'm really wondering about that, honestly.
Richie Guerzon: I know they're going to be checking their temperatures before so does everyone have the equipment to even just do that simple procedure? Right the laser one, right? So, you're not touching anyone exactly.
Manon Newell: Yeah, and I you know, I would be implementing that across the board for employees and for patients of the employees of course. I think that there's been you know talk about, I want to say it’s Henry Schein, they were talking about making, or they already have the technology to do testing for COVID like a rapid test. But again, testing isn't ramped up across the country yet just in the capacity that we need it for regular Health Care. But I think that will be something in the future until there's a vaccine. I think eventually our doctors will have some kind of testing available to test patients which would ultimately be the safest but yeah, I think for everyone flexibility is going to be really important to understand that you know, if you're going back next week it doesn't mean that in the next 12 months there may be times where your kind of going to be pulled back again. I think it's going to be so heavily dependent on the infection rate in different parts of the country and how that's trending if it's going up or down or flat, you know, and so I think the more that everyone can kind of be of the mindset that things are going to be changing and we have to be able to roll with that the healthier they're going to be, you know, as a leader for their staff even in their personal lives like just to not be super rigid about what you think things are going to look like when you go back because I think they are going to change a lot.
Richie Guerzon: So, be super adaptable huh? So, if you're if you're a practice that was really experiencing a lot of growth, do you think you should just keep striving forward and just roll with the punches or what would you say?
Manon Newell: Yeah, so I mean I think you know, we're all in business to make a living right and I think when at the beginning of this when you know, our clients were really struggling with the decision whether to lay people off or not all of our clients are very close to their team and that was like a really gut-wrenching decision. But the ultimate decision was we have to do this in order to preserve this business so that everyone has something to come back to. That still has to be kind of our overarching goal. Right? I mean keeping the business healthy is ultimately supporting you and your family as well as all your employees, you know, not to mention the service that you're offering in your community for your patience. So, I think that has to be the goal. I think that it has to be realistic in the sense that we don't know yet how that's going to impact. I think because overall and no one is quite sure. I was listening to this from a looking epidemiologist who was talking about opening schools and we don't really know why most kids don't get sick from this virus, right? Yeah. In a way, that's really good for probably pedontist orthodontist, right the majority not all I mean you have adult patients as well. But majority of your patients are children. So, the question that is remaining right now from that standpoint is we don't know if children really carry or shed this virus at high rates. So, like when we start putting them back into their normal environments like school like the wrong office, what is the impact going to be on people who are more susceptible to the virus? So, I think we don't know that yet and that's going to play a big role. You know, if it turns out that we start kind of, you know, putting kids back. It sounds like they're animals like putting them back into their natural habitat and kind of stuff. Yeah, you know kind of how things move forward with this for our clients. If it turns out that we start putting kids back in school, I would assume most states, I think I know in Ohio we're done. There's no school here for the rest of the year, is it that way where you guys are?
Richie Guerzon: I don't think so, but I don't follow because my kid’s not in school.
Manon Newell: I think a lot of states haven't made a final decision but Ohio did this week or last, my days are kind of all running together, but this week or last week Ohio made that.
Richie Guerzon: Are they going to start school early? What is the plan to make up this time where they weren't getting educated?
Manon Newell: You know, I don't know like in my son's school he’s actually had like real school. I mean it's virtual but it's real in the sense that like it starts at the same time every day. He shows up for each one of his class periods but he goes to a small school so they can kind of do that. With the bigger
public schools, I'm not sure what they'll do. I mean they may go back early. I heard something else where they were talking about that they may send one group of students for one week and groups of students may rotate in and out of the building so that they can maintain distance regulation and again that's an idea but that could change if you put kids back in school and you don't see a lot of increase in infection rate from doing that then that tells us a little bit more about how we operate in this new environment, you know before we have a vaccine or an effective treatment, so I think and that's what I'm saying about the adaptability part is I think that there's going to be a lot of this kind of back and forth over the next few months because we're it's all kind of experimental right? Kind of like opening the door a little bit and stepping out and seeing what happens.
Richie Guerzon: I mean all of this is an experiment because there's great history and we are writing history right now.
Manon Newell: from a positive standpoint, I mean children always need orthodontic care. They're always going to and it's one of the things that I think you know parents will always try to make that happen for their kids. They will prioritize it above a lot of other expenses and so I think that we'll see some decline in production this year just based off the fact that a lot of people have lost their jobs or are on unemployment. However, as the year goes on and we start to see how things look as we kind of like, you know open up more businesses than I think that the overall impact will not be drastic. I think it will be small and then hopefully offset by some of these government programs like the PPP loan, because two months of your payroll plus the qualifying expenses is not insignificant in terms of a year’s worth of overhead. So, I do think that those things will help to offset it and I think you know, it's all really speculation at this point. I think we're going to know more if we sat down and talked in three weeks, I think we're going to know more than we know right now about ultimately how things are going to look I think all of our clients, them reopens are going to be very cautious and they're definitely taking all the precautions that they need to take for their staff and patients. They're going to be doing I think what all of us are doing which is just taking it a day at a time, a week at a time and just seeing what happens and hopefully we keep seeing the infection rate stabilized and drop and you know life can be sort of I don't think it's ever for at least for the foreseeable future, it’s not going to look like what you think of as kind of normal life, but I think that you know, we have a lot of really smart people all over the world working on this. We have you know, people who are pretty smart and adaptive when it comes to business and I think that everyone will kind of do what they need to do in the interim to kind of keep things moving forward. So, you know, I really feel like the silver lining in all of this is that I think there will be a lot of really positive change that comes out of it, which is hard to see when you're you know kind of at the place where we are which is like kind of the jumping off point. I think teams we'll be stronger when they come back to the workplace after they've gone through this together. I think everyone will be much more sort of appreciative of the work that they have right I catch myself doing that every day. If I'm kind of complaining about something I doing with work. I'm like, you know, I'm really actually grateful that I'm working.
Richie Guerzon: I mean even just working from home, I love seeing my family all day. But it would be nice to be in the office and see my work family to get back to another routine.
Manon Newell: There is definitely some benefit to the work-home separation.
Richie Guerzon: So, let me ask you, I don't know if this is controversial or not, but when I was just talking to Vicki she mentioned that sometimes there's someone on the team that really is just not a good fit and they actually can, and I've used the word virus and she's like that's a good analogy. So, let's say you have this person on your team and you laid them off like I believe I know what you're going to say, but do you suggest not re-hiring that person and then rehire someone else so that your PPP loan is still forgiven. I assume that's how it would work.
Manon Newell: So, it's a little murky on that and actually, I'm kind of glad that you brought this up because there was something I was meaning to talk about which I kind of lost. There is going to be more clarification on the SBA rules and the interim final. On the 26th, there is supposed to be more clarification on some of these things. There are lots of open questions which that is one of them, like if you lay people off and there's someone you don't want to bring back, what does that do? Because you know, the actual rules say full-time equivalents. That terminology is not defined.
Richie Guerzon: Full time equivalent? So, you can or you could hire a bunch if you're not an orthodontist I assume, like independent contractors.
Manon Newell: Not independent contractors so they have to be on payroll but the term full time equivalent, I don't think anybody knows exactly what that means. Okay, so could you for instance take two part-time positions and combine them into one full-time position?
Richie Guerzon: That’s what I would assume that means.
Manon Newell: Is that a full-time equivalent do you have to bring back, you know, I think that we know that you don't have to bring back the same people but the same number of people or the same number of full-time equivalents, which I think on the 26th hopefully they're going to give more guidelines about what full-time equivalent means. Some of those other kinds of questions along the same lines that pop up are there may be employees who don't want to come back into this field of work. And so how does that affect your forgiveness because you're offering the job back, but for whatever reason they're not taking the job. So now you've reduced your numbers on payroll. My initial kind of feeling about this is everyone may not need the same level of staffing that they had prior to this. And again, that's probably something that they're not going to know for several weeks because I think there will be a process of ramping up. I think orthodontist will be different from dental specialists in the sense that we have a lot of patients who have not seen the doctor for quite a while who have sort of like some, you know at home fixes to orthodontic issues or you know, kind of emergencies those patients are going to need to get back in. So, I do think that most offices in the first couple of weeks are going to be kind of slammed with
just seeing their existing patient load.
Richie Guerzon: Yeah, that's been other guest’s opinion as well. They will increase hours and really handle this very systematically.
Manon Newell: I do think that will be the case over the next couple of weeks for sure. Probably the next month, really. Based on our clients that have been doing virtual consults there appears to be a really good level of interest in starting new patients. I'm really hopeful actually about that. I think that they are going to be seeing patients in the office. I think they're going to be doing a lot of follow-ups from those virtual exams that they've been doing. If I had someone that wasn't coming back, I think my instinct would be unless you feel very tight, like maybe you were just not totally staffed appropriately prior to this so you were running short in the clinic and like everybody was kind of running their legs off and understaffed unless I was in that position I don't know if I would immediately look to fill that space just for the purposes of loan forgiveness.
Richie Guerzon: That's fair because loan forgiveness wouldn't apply to a temp agency, right?
Manon Newell: No because you're paying the temp agency that persons not on your payroll. I will say that we have recruited and hired for different clients during this with an expected start date of I don't know. Whenever the that practice reopens there are a lot of people looking for jobs. Very qualified people is what I found when I was going through resumes, so I would just you know, say to kind of calm everyone's fears. I think if you're going to need to hire somebody it's not going to be difficult to find a qualified person. So I wouldn't make that knee-jerk reaction. I would see how your schedule is flowing how the restrictions however those end up and again, they're going to change over time. But at least for that first month, whatever restrictions you're going back into the office with that's going to definitely have an impact on how many staff members you need in the office on any given day. I would see if you know the staff that you have coming back if you're one short or too short, I would see how that new schedule is working with that team. If you're feeling the pressure that you really need to hire somebody then I don't think that'll be a problem. You can hire you can bring them on within that period and it's still going to count towards your forgiveness as long as that's by June 30th, and so like bringing a new staff member by June 30th. So, most practices are opening next week or the week after which gives you a fairly good amount of time to kind of see how the team that you have is working with your current schedule and probably to project out a little bit into the future too and kind of think about what our needs going to be because this is changing every week. And you know, do we need to start looking for someone.
Richie Guerzon: That was making me think if what if a doctor is about to open another office and they feel good about that plan, and they have the reserves to do it, would you say now because of everything that's going on there is actually a better pool of people, and they have a higher chance of getting very high qualified people?
Manon Newell: Yeah, I think so. I think right now is ironically not a terrible time to be looking to hire probably right now through the end of the year. I would think prior to this. Obviously, we were having you know, we had really good employment levels so finding qualified people took a little bit more effort. If somebody has the cash reserves and they feel good about a plan to open an office and they already have those fixed expenses that they have the building and the equipment and everything else. I think it right now is a great time to recruit.
Richie Guerzon: That's interesting. Yeah Silver Lining there.
Manon Newell: Yeah, there are silver linings and there will continue to be. It's not all doom and gloom but it is changing things for us in the short term
Richie Guerzon: Alright, so if anyone has any questions, how should they reach you?
Manon Newell: You can always email me at Newell@EnagagedOrtho.com. You can look on our website and EngagedOrtho.com and there are all the various ways to get in touch with us.
Richie Guerzon: That’s great. All right. Thanks for your time. We always learn a lot when you're on. All right. We'll stay safe out there and have fun
Manon Newell: You too. Thanks, Richie.