At this time, based on all the things I have read and a number of legal seminars given by attorneys, it seems community associations would not be eligible for PPP (Payroll Protection Program Loans). There are some questions about eligibility for the Economic Injury Disaster Loan (EIDL) loans direct from the SBA. Some attorneys seem to think yes while others think no. The problem, it seems, hinges on the definition of not for profit. While most associations are not for profit under state law, they are not under federal law.
The other issue with these loans is that you have to have some kind of economic disaster (lost Income or increased costs) due to COVID-19. While we think that the revenue loss may be coming, due to people being out of work, this is not something we can show at this point.
The problem here is that while new funding has been approved, it may not last until we have the losses.
We have done a lot of research on the accounting side of our business and you can find a lot of information we have put together at https://rmsaccounting.com/coronavirus-information-and-links/ . We are adding information daily. We are also adding information daily to the Royale Management site under https://royalemanagement.com/covid-19-updates/
At this point, our recommendations for the board is to put the question of what they qualify for to their attorney. Then if the attorney advises you to apply, the board should vote to make an application.
To date, on the business side, we have seen some of the $10,000 advances on the EIDL but no other funding or even contact from the SBA. The application for these loans is made directly to the SBA, unlike the PPP loans that are through your bank.
