Payroll Protection Program (PPP)

Recently, the Retail Council’s Carly Brentini talked with M&T Market President, Peter Newman.  Peter answered a handful of your questions related to PPP.  For comprehensive information on the program, readers should visit M&T’s website Be Informed Business – Help Center | M&T Bank | COVID-19 Be Informed Business – Help Center | M&T Bank

Who qualifies for a PPP loan?

We should start by differentiating that there are 2 types of PPP loans available now with the passing of the latest pandemic relief bill.  The SBA is re-opening the original PPP under the same guidelines that existed last Summer.  In general, any for-profit or not-for-profit 501c3 business that employs 500 or fewer employees and was impacted by COVID19 is eligible for a PPP loan.  The other PPP loan is a Second Draw PPP.  This loan is available to anyone who had a first PPP, employs 300 or fewer employees, and experienced a 25% decline in revenue for at least one quarter in 2020 measured over the like quarter in 2019.

How do I apply for a PPP loan?

PPP loans are administered through banks.  At M&T Bank our customers will be able to apply through an online portal that is most easily accessed through one of our Online Banking systems.

Am I eligible to apply for the second round of PPP if I didn’t apply the first time?

No.  Second Draw PPP loans are for businesses who already received a PPP loan.  If the business did not receive a PPP loan they may be eligible for one now.

If I applied for a loan in the first round and didn’t get an answer, do I have to reapply for the second round?

All applicants from the first round would have received an answer.  If you mean to say if a business was ineligible for the PPP loan earlier this year can they apply now if they now meet the requirements? Then, yes.  I’m aware of at least one business that unfortunately has experienced a decline in employee count and they now qualify as a small business per the SBA’s definition; 500 or fewer employees.  This business plans to apply for a First Draw PPP loan.

Do PPP loans cover paid sick leave?

Payroll costs are pretty comprehensive.  It includes compensation to employees in the form of wages, salary, commissions, cash tips, as well as payments for vacation, parental / family leave or medical/sick leave.

Will I owe taxes on my PPP loan?

No.  PPP loans are specifically not taxable.  With the latest Bill, congress also clarified that businesses may expense the eligible costs that are covered by the PPP loan.

How can I get my PPP loan forgiven?

There is a forgiveness application that the borrower needs to complete and submit to the bank that provided their PPP loan.  At M&T Bank, it is a digital application process that is very similar to the original loan application.

Why isn’t it a guarantee that PPP funds will be available?

Congress approved $285 Billion for this program.  If there is more demand than that dollar figure, the program will run out of funds.

Why are multi-million dollar companies getting PPP but my small business isn’t?

There was a great deal of publicity about a few large companies receiving PPP loans last April and then the initial funding ran out – I think 13 days after the SBA opened the program.  While we were successful in getting most of our customers into the program before funds ran out, some did not – and that was very frustrating.  Thankfully, additional funds were allocated and the program re-opened.  At that point, every company who qualified should have received a loan if they applied because when the SBA closed the program at the end of the Summer, there was still money available.

What is the difference between the Paycheck Protection Program (PPP) vs. Economic Injury Disaster Loans (EIDL)?

There are many differences.  I’m most familiar with the PPP because it is administered through banks.  EIDLs are direct loans from the SBA.

Additional resources

U.S. Chamber of Commerce – 6 Things Businesses Need to Know About Second-Draw PPP Loans

Small Business Administration – SBA Prioritizes Smallest of Small Businesses in the Paycheck Protection Program 

The White House – Biden-Harris Administration Increases Lending to Small Businesses in Need, Announces Changes to PPP to Further Promote Equitable Access to Relief

PPP Loan Resources – The Bonadio Group 

U.S. Small Business Administration PPP

Additional Guidance Regarding Second Round of PPP Loans – What You Need to Know | The Bonadio Group 

Empire State Development – SBA PPP

NRF SMB’s PPP – as updated by the Economic Aid Act

U.S. Chamber of Commerce – Guide to Small Business COVID-19 Emergency Loans 

U.S. Department of Treasury – The CARES Act Provides Assistance to Small Businesses