South Central Kansas Medical Center recently received word that it won’t have to pay back any of the $1.5 million federal loan it received early in the coronavirus pandemic to keep employees on the job.

CEO Jeff Bowman told the hospital trustee board last month that the medical center would not be required to repay the Payroll Protection Program loan.

Bowman said city-owned hospitals at first were ineligible for PPP loans. He said he was ecstatic when the rules were changed and the hospital was able to receive those funds.

“The only thing more exciting than the day we were approved for the PPP loan was the day we learned the loan was converted to a grant and no longer required us to repay,” he said.

At William Newton Hospital in Winfield, Marketing Director Sarah Johnson said the hospital had received a total of $3.9 million.

“We have submitted the application for that loan to be forgiven, but we are still waiting on confirmation,” she said.

Bowman said he was not surprised when SCKMC’s loan was forgiven. The medical center closely followed the requirements in order to make sure that it would be converted to a grant.

“We sat on some government funds,” he said. “But the PPP loan was specifically required to cover payroll and we utilized it for that purpose as per the guidelines.”

Trustee Jay Warren said the pandemic had created serious financial problems for every hospital in the nation. He said if the government had not stepped in to help, many hospitals would have gone under.

“We suffered through this thing, and there were times when we couldn’t even see patients,” he said. “I hate to think of what could have happened without the help.”

Warren said that forgiveness of the PPP loan had given the hospital a little cushion that would help it to come back and do well.

PPP loans are backed by the Small Business Administration and were designed to help small businesses to retain their employees during the pandemic. Several requirements needed to be met for the loan to be forgiven. At least 60 percent of the funds had to be used for payroll and businesses needed to maintain a certain number of employees.

The remaining funds could be used for other allowable expenses such as business mortgage interest payments, rent or utilities.

SCKMC’s CFO Debbie Hockenbury said that a forgiveness application with supporting documentation was submitted in February.

“Employee retention criteria was met, and the funds were used for eligible expenses,” she said. “Small Business Administration paid the loan in full early March.”

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