Overview of the Paycheck Protection Program (PPP) - Consolidated Appropriations Act 2021 - M&T Bank
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Overview of the Paycheck Protection Program (PPP)
Consolidated Appropriations Act 2021
Information based on SBA guidance as of January 8, 2021
Updated: January 15, 2021
1What do I need to know about the reopening and expansion of the PPP?
On December 27, 2020 the President signed into law the Consolidated Appropriations Act 2021, which continues the
PPP efforts to help businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.
Highlights of PPP:
Re-opens to first time PPP borrowers for loans up to Prohibits any entity that has gone out of business,
$10 million ($20 million corporate group cap) and has no intention of reopening, from receiving a
PPP loan
Introduces Second Draw loan program for existing
PPP borrowers; up to $2 million ($4 million corporate Simplified loan forgiveness for borrowers with PPP
group cap) loans up to $150,000
Made the following additional eligible expenses for
loan forgiveness:
✓ Covered Operation ✓ Covered Supplier costs
expenditures
✓ Covered Property damage ✓ Covered Worker protection expenditure
costs
2What are the key eligibility requirements for an Initial PPP loan?
Businesses, including certain nonprofits, veterans organizations, tribal business concerns, sole proprietorships, self-
employed individuals, and independent contractors must have been in operation on February 15, 2020.
Initial PPP loan applicant:
✓ Has not previously received a PPP loan from M&T or another
financial institution
✓ Businesses with not more than 500 employees*
✓ Is required to refinance the balance on the EIDL loan obtained Loan amount maximum
between January 31, 2020 and April 3, 2020 into your initial (first
( ) X 2.5
draw) PPP loan if you used the EIDL for payroll expenses Average
monthly
payroll
costs
Businesses in certain industries can have more than 500 employees if they meet or up to $10 million
applicable SBA employee-based size standards for those industries (NAICS code) or if
they meet both tests in the SBA’s “alternative size standard” as of March 27, 2020.
Small businesses in the hospitality and food industry with more than one location could
also be eligible if their individual locations employ less than 500 workers.
*The 500 employee threshold includes all employees: full-time, part-time, and any other status**
3What are the eligibility requirements for a Second Draw PPP loan?
All businesses, including certain nonprofits, veterans organizations, tribal business concerns, sole proprietorships, self-
employed individuals, and independent contractors, must have been in operation on February 15, 2020.
Second Draw PPP loan applicant: Loan amount maximum
✓ Previously received a PPP Loan (from M&T or another financial
( ) X 2.5
Average
monthly
institution) and will or has used the full amount only for authorized payroll
uses by the disbursement date of the second PPP loan costs
✓ Has no more than 300 employees combined with affiliates (unless
or up to $2 million
NAICS 72, 511110 or 5151 then 300 per location)
✓ Can demonstrate at least a 25% reduction in gross receipts
Accommodations & Food Services loan
between comparable quarters in 2019 and 2020; or if in
amount maximum (NAICS code 72)
operations for all of 2019, you may use annual gross receipts
( ) X 3.5
Average
✓ Has not nor plans to receive a Shuttered Venue grant monthly
payroll
costs
or up to $2 million
*The 300-employee threshold includes all employees: full-time, part-time, and any other status**
4Highlights of PPP
Borrowers will NO
need to certify
Prepayment penalties
that they’ve been
impacted by COVID-19 as well as
loan per Tax Collateral required
meet other SBA eligibility
requirements (e.g. size standards) Identification
Number Personal guarantees
Repayment terms:
Prohibits any entity that has
1%APR
Interest rate
60MONTH
Loan term
gone out of business, and has
no intention of reopening, from
applying for a PPP loan
5What documentation do I need to supply when applying?
1. Gather your ownership information, including your Tax Identification Number and breakdown of ownership
2. Gather documentation to establish that the business was in operation on February 15, 2020
3. Gather and Scan PDF Copies of 2019 and/or 2020 Year-to-Date payroll documents
Documentation to demonstrate the loan amount may include, but is not limited to, the following:
For Businesses with Employees (if applicable): For Sole Proprietorships and Independent Contractors
(if applicable):
✓ 2019 and/or 2020 IRS 940, 941 or 944 payroll tax reports ✓ Form 1040 Schedule C or F for 2019 and/or 2020 (Self-employed
✓ Payroll statement or similar documentation to demonstrate operations individuals with no employees must submit Form 1099-MISC in addition
on 02/15/20 to 1040 Schedule C or F)
✓ For S or C Corps: Equivalent payroll processor records or IRS Wage ✓ Payroll tax filings
and Tax Statements, along with the filed business tax return ✓ Payroll statement or similar documentation to demonstrate operations on
✓ Summary of payroll expenses for Individual Employees with cash 02/15/20
compensation over $100,000 ✓ Bank Statements to demonstrate payroll disbursements
✓ K-1 (IRS 1065) for Partnership Self Employed employment income ✓ General Ledger Reports or statements to assist with Health Care and
✓ General Ledger Reports or statements to assist with Health Care and Retirement benefits
Retirement benefits (S or C Corps may use IRS Form 1120 or IRS ✓ State Quarterly Wage Reporting Forms
1120-S)
✓ State Quarterly Wage Reporting Forms
Second Draw Applicants: Documentation demonstrating 25% reduction in gross receipts for loans greater than $150,000 is required. Including, but not limited to, tax
forms, quarterly income statement, or bank statement. If the loan is $150,000 or less, you have the option to provide at application, however, you must minimally supply
by loan forgiveness.
6Tips for preparing payroll costs
TIP:
Understanding your
How do I calculate my annual PAYROLL COSTS? Annual Payroll costs
will help with
completing the online
application process
Sum of Sum of
PAYROLL
INCLUDED EXCLUDED
COSTS
payroll costs payroll costs
What PAYROLL COSTS are included?
SELF EMPLOYED &
Payments required for group INDEPENDENT
Salary, wages, Employee benefits including health care benefits
commissions, or tips (capped CONTRACTORS
EMPLOYERS
costs for vacation, parental, including insurance
at $100,000 on an annualized ✓ Wages
family, medical, or sick leave premiums (such as health,
basis for each employee) ✓ Commissions
dental, and vision insurance)
✓ Income
✓ Net earnings from self-
Payment of state and local Employer paid 401K employment
taxes assessed on Allowance for separation or matches, profit sharing
compensation dismissal payments, pension Capped at $100,000 on an
(excludes employer paid FICA contributions and SEP annualized basis for each
taxes) contributions for W2 Owners employee
7How does loan forgiveness work?
PPP loans may be eligible for loan forgiveness if the borrower uses the proceeds to maintain payroll and eligible
business expenses.
What costs are eligible for loan forgiveness?
A borrower is eligible for loan forgiveness equal to the amount the borrower
spent on the following items during the 8-24 week covered period:
60% Usage for payroll costs
Minimum
Payroll expenses, including health and retirement benefits,
and payment of state and local taxes imposed on employee
Payroll costs Covered Personal protective payroll
equipment (PPE) expenses
Business rent & lease Covered Property damage
agreements
Business mortgage interest
expenses
Covered Supplier
40% Usage for other eligible
business expenses
Interest on business mortgage obligations, rent/leases, utilities,
expenditures personal protective equipment, property damage, supplier
Business utility payments Covered Operational expenditures and operational payments
Electricity, gas, water, transportation, expenditures
telephone, and internet access Note: Mortgage loans, rent & lease agreements, and utilities had to
be in effect before February 15, 2020
8How do I apply for a PPP loan?
Visit www.mtb.com/business-informed to begin your PPP application
Applicants must have an M&T business checking account and can demonstrate business was in operation on
February 15, 2020.
Application tips:
If you need assistance, please call:
It is recommended that a Business Owner complete the online PPP
application
Your Relationship Manager or
Branch Manager
Have all of your documentation ready before you begin (Second
Draw applicants will need their SBA loan number)
Telephone Contact Center:
1-800-724-6070
Review and become familiar with the SBA Form 2483 or 2483-SD
as these questions will be asked in the online portal.
9Disclosure 10
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