Canyon Lake POA to pay 8-weeks of payroll with COVID-19 PPP ‘loan’

More than $1 million in funds have been obtained by the Canyon Lake Property Owners Association via the Payroll Protection Program (PPP). These funds will primarily be used to finance the payroll of most of its 140 employees. This loan, authorized from the CARES Act’s Small Business Administration (SBA), will be forgiven if used during the eight weeks after receiving it to fund payroll, rent and utility costs of small businesses.

“These funds will greatly assist the CLPOA to navigate this health and economic crisis with minimal impact to our operating funds,” Eric Kazakoff, Canyon Lake POA General Manager, said. “Our initial financial models indicated we could potentially incur losses equal to or above the amount we received, and therefore management and the board unanimously supported pursuing these funds.”

The Canyon Lake POA intends to use up the entire $1,103,000 it received from the SBA to pay its payroll, thus its intention is to not have anything owed back to the SBA after these eight weeks complete. The POA is transferring these specific funds to a separate bank account in an effort for not only transparency, but to track the disbursement for SBA auditing purposes later.

Having obtained these funds for the payroll, the association will be able to withstand the effects of the COVID-19 crisis and the resulting shutdowns of some of its revenue-generating amenities. Otherwise, the shortfall would have needed to come from either requiring additional income or cutting costs.

The PPP is the part of the CARES Act that assists small businesses with fewer than 500 employees that have been impacted adversely by the COVID-19 crisis. In approving the loan, the SBA determined the Canyon Lake POA qualified as a small business that was so affected.

“These PPP funds will allow us to continue to pay our employees despite our outside revenue sources being forced closed,” Eric said.

The POA’s revenue-generating restaurants, campground and golf course were immediately shut down after the state-mandated closures were announced. The POA has not made public the amount of revenue it has lost or will continue to lose because of these closures, but recently announced that the funds from this PPP loan will largely offset those losses in the short term.

“Even today,” Eric said, “no business really has any idea when we will be able to return to our former ‘normal’.”

The Canyon Lake POA obtained the PPP loan as part of the initial application period shortly after the CARES Act was announced.

“We also know that many smaller businesses have struggled to get these same loans through the large national banks,” Eric said. “We are very sensitive to that and we hope that the second round of funding recently approved will assist all of those businesses as well.

“Our controller, Susan Dawood, and our representatives at Seacoast Commerce Bank did a remarkable job of quickly applying for and obtaining this forgivable loan, and we were very fortunate to receive it.“