By Greg Ellison

Money will protect payroll for association employees

(April 30, 2020) Although many businesses and nonprofit organizations were left out of the rush for paycheck protection program loans two weeks ago, the Ocean Pines Association was not.

The OPA received $1.143 million in Small Business Administration coronavirus relief money by having its paperwork done in time for processing before the money ran out on April 16.

OPA President Doug Parks said the emergency funds would be used to maintain payroll for association employees during the current economic turmoil.

“We are fortunate to have been approved by the SBA for a loan associated with the Paycheck Protection Program,” he said.

The PPP money, $349 billion, was released on April 3, after Congress in March approved the Coronavirus Aid, Relief and Economic Security Act.

In response to the inability of many businesses to obtain the low to no-interest loans, Congress approved a second round of funding, including $310 billion for PPP, $75 billion for hospitals, $25 billion for covid-19 testing and additional funds for the Economic Injury Disaster Loan program.

After the SBA program was unveiled, a work group was rapidly formed to examine the topic. That group consisted of Parks, General Manager John Viola, Director of Finance and Operational Logistics Steve Phillips and OPA Treasurer Larry Perrone.

“The workgroup met with OPA attorneys who confirmed the Association’s qualification criteria and expense compliance requirements,” he said. “

Parks said the OPA’s local lender, Bank of Ocean City, provided further guidance.

Also supporting the OPA team were Senior Executive Secretary Michelle Bennett and Director of Public Relations and Marketing Josh Davis.

Davis said to help navigate the hastily constructed bureaucratic process, the OPA work group consulted with John Hickman, Eastern Regional Director of the Maryland Small Business Development Center

“He hosted several zoom sessions on the PPP loan, which we attended along with dozens of other local businesses,” he said. “He also helped answer a few questions via email.”

Hickman heads the Eastern Region Maryland SBDC,  an outreach program run by the Perdue School of Business at Salisbury University for local businesses.

“We provide assistance to businesses throughout Delmarva, but we’re part of a statewide network that’s part of a national network,” he said. “The largest single source of our funding comes from SBA.”

Hickman said expert guidance was required by a wealth of local businesses and qualifying entities after the rapid roll-out of PPP funding, which was adapted from the existing SBA 7(a) loan program.

“The PPP structurally is a loan program that SBA adapted their existing 7(a) loan program … to be able to quickly work through the local lending institutions to get funds out to businesses to allow them to maintain payroll,” he said. “Generally, Congress will pass a bill … and they’ve got months to implement that … this was one they turned around in a little over a week [and] you can’t do that from starting at ground zero.”

Under the PPP guidelines, loan amounts used for payroll costs are forgivable, as well as less than 25 percent of awarded sums for mortgage interest, rent, and utility costs incurred before Feb. 15 and paid over the eight-week period after loan receipt.

Parks said the OPA, which has also applied for funds through the Economic Injury Disaster Loan offered through the SBA, would continue to operate and meet current financial obligations while monitoring the evolving health crisis.

“We are hoping that our amenities and other services affected by the covid-19 pandemic will be open in the next several weeks and we can return to some level of normalcy,” he said. “In the meantime, we ask all OPA members to abide by the government mandates and hope everyone stays safe and healthy.”