Bass, Berry & Sims attorney Angela Humphreys discussed a stipulation that allows private equity (PE)-backed physician groups to potentially access paycheck protection program (PPP) loans under the CARES Act. While most PE-backed companies are probably excluded from accessing PPP loans, the possible exception to this is when a management services organization (MSO) invests in a physician practice group. However, there are still questions that linger regarding eligibility, but Angela agreed that “whether an MSO model qualifies will depend on how the management relationship is structured and will vary case by case.”
But physician practice groups should consider the loans, “Given the situation, a lot of providers are looking to avail themselves to help bridge that cash flow. Suffice to say people are looking at the current situation in days, not weeks or months,” said Angela.
The full article, “PE-Backed Physician Groups May Find Caveat to Access to Paycheck Protection Loans,” was published on PE Hub on April 5 and is available online (subscription required). For additional insight on this topic, read our recent alert, “Are You an Affiliate? Guidance for Physician Practice Management Companies under the Payroll Protection Program.”