Paycheck Protection Program (PPP)
New PPP Borrowers

Congress passed and President Trump signed amendments to the March 2020 CARES and other laws to create a new round of Paycheck Protection Program Loans to first-time borrowers. Firms and organizations which were eligible in 2020 remain eligible, however eligibility has also been expanded to include other types of organizations. See the eligibility details below. Customers Bank is now taking PPP First Draw Loan applications. You can apply by using the link.


Mortgage Interest
Utilites Expenses
Additional Expenses



2.5x average monthly payroll, 3.5x average monthly payroll for food service & accommodations, capped at $2 million


1% APR

1% fixed Annual Percentage Rate



5 year term total



eligible for 100% forgiveness with approval

The foregoing is presented as a matter of convenience, does not constitute legal, accounting, or tax advice, and does not purport to address all aspects of the March 2020 CARES Act or subsequent legislation. We strongly recommend that you consult your attorneys, CPAs, tax advisors, and financial consultants with any questions.


Organizations including small businesses, nonprofit organizations, veterans organizations, sole proprietors, self-employed individuals or independent contractors that were eligible in the first rounds of PPP in 2020 remain eligible. Also now eligible are 501(c)(6) membership organizations with up to 300 employees, destination marketing organizations (DMOs), housing cooperatives, newspapers, broadcasters, and radio stations.

Allowable Expenses

In addition to payroll-related, rent, mortgage interest and utility expense; eligible expense have been expanded to include:

  • personal protective equipment and workplace construction/adaptations to health and safety guidelines;
  • software, cloud computing, human resources, and accounting needs;
  • property damage due to “public disturbances” during 2020 and which were not insured; and
  • required business supplies that would have been consumed and expensed had business operations continued as normal.


How are the 2.5 months worth of payroll expenses calculated?
Applicants will calculate the loan amount by taking the total eligible payroll costs for 2019 or 2020, divided by 12 to identify the average monthly eligible payroll for the calendar year. This value for average monthly eligible payroll cost is multiplied by 2.5 to calculate the loan amount.

Am I eligible to receive additional first draw funds if I did not take the full loan amount I qualified for in 2020?
Yes. The latest SBA guidance states that borrowers under certain circumstances will be eligible for readvancements if the full amount of the first draw loan was not received.

Do first draw PPP applicants need to demonstrate a 25% reduction in gross receipts?
No, the 25% reduction in receipts requirement only applies to second draw applicants.

How should independent contractors and sole proprietors without employees calculate their loan amount? What documentation is required?
Independent contractors and sole proprietors may calculate their loan amount based on 2.5 months worth of net income from 2019 or 2020, subject to a cap of an annualized salary of $100,000. The 2019 or 2020 Schedule C tax filing should be provided.

Do applicants have the choice of using either 2019 or 2020 payroll documentation to calculate their loan amount?
Yes, the loan amount may be based on either 2.5 months worth of eligible payroll costs from 2019 or 2020.

I have not filed my 2019 taxes yet, can I submit my 2018 tax return?
The SBA requires applicants to provide 2019 or 2020 documentation. Documentation other than tax returns may be acceptable.

Is owner draw also included in eligible payroll costs when calculating the loan amount?
Owner draw is included in eligible payroll when calculating the loan amount, subject to the exclusion of amounts in excess of an annual $100,000 amount.

Are owners included in the 500 employee limit for eligibility?
Owners are included in the employee count when evaluating eligibility for a PPP loan.

If a business received an SBA loan (not a PPP loan), are they eligible to apply for a first draw PPP loan?
Yes. Other SBA loans do not affect eligibility for a PPP loan.

What documents are required to apply for a first draw loan?

Applicants must provide the following when applying for a First Draw PPP loan:

1. A payroll register as of 2/15/2020 or for sole proprietors and independent contractors, a February 2020 bank statement or invoice showing the business was in operation on February 15, 2020

2. Documentation verifying the number of full-time equivalent employees (FTE) on the applicant’s payroll

Documentation may be a combination of the following:

  • 2019 or 2020 calendar year third party payroll report listing all employees and the average number of hours worked per week
  • 2019 or 2020 941 tax filings
  • For seasonal employers, payroll may be determined by any consecutive 12-week period between February 15, 2019 and February 15, 2020

3. Documentation that supports the amount of payroll costs incurred for either 2019 or 2020.

Documentation may be a combination of the following:

  • 2019 or 2020 W3 or W2 for all employees
  • 2019 or 2020 calendar year third party payroll report listing all employees and total wages
  • all four quarters 2019 Payroll Tax Filings (941/940)
  • Income and expenses from a sole proprietorship
  • Bank records
  • 2019 or 2020 Form 1099-MISC, Schedule C or Schedule F (self-employed individuals only)

At what point in time is the 500 employee count evaluated for eligibility?
Employee counts are evaluated at the time of loan application.

What is included in the 2.5 months worth of eligible payroll costs?
Payroll costs include employee compensation of variety of forms, employee benefits paid by the employer, owner compensation, retirement plan costs paid by the employer, and state or local payroll taxes.

Are independent contractors eligible to apply for a PPP loan?
Independent contractors and self-employed individuals are eligible to apply for their own PPP loan. Payments to these individuals should not be included in a business’ payroll calculation for this reason.

Are workers compensation costs included in the 2.5 months worth of payroll costs?
Workers compensation costs are included in eligible payroll costs if part of state payroll taxes.

Can I include costs to independent contractors in my payroll calculation?
No, only payments made to W-2 employees are eligible payroll costs. 1099 payments are ineligible as these individuals are eligible to apply for their own PPP loan.

Do you have to be a Bank customer to apply for a PPP loan?
We are issuing PPP loans to non-customers and thank you for choosing our institution. We do ask that you create a business DDA account with our Bank so we can deposit the funds into your account once received from the SBA.

The new form asks how the funds will be used. Are these cost categories included in payroll costs since the loan is only based payroll?
The loan amount is solely based on payroll costs, but the loan funds may be used for the various cost categories listed.

Should amounts paid to employees for an annualized salary greater than $100,000 be excluded from the loan calculation?
Yes, only compensation up to an annualized salary of $100,000 should be included in the loan amount calculation. Benefits costs are not included in the $100,000 threshold.

If a business was closed for a few months and just reopened, is the business eligible for a PPP loan?
As long as the business is not permanently closed and other program requirements are met, the borrower would still be eligible for a PPP loan.

If a business purchased another business in late 2020, can the payroll expenditures due to the purchase be used to calculate the loan amount?
Payroll costs are evaluated per entity. Thus, if a business acquired another, the additional payroll due to the acquisition would be included in the loan calculation for the months the businesses were under common ownership.


What is the deadline to apply for loan forgiveness?
The SBA has not set a specific application deadline. Borrowers may apply for forgiveness any time before the maturity date of the loan

Can I still apply for and receive forgiveness of my first PPP loan?
Yes. Borrowers can still apply for forgiveness for loans issued in 2020 even though the SBA is providing another round of funding.

Are payroll service provider costs eligible for forgiveness?
Yes. New guidance states that accounting and other human resources costs are included in covered operations expenditures.

If I receive a first and second draw, and together they are under $150,000, can I use one certification to apply for forgiveness?
First and second draw loans are considered separate loans, so forgiveness will be applied for separately. However, forgiveness can be applied for a the same point in time.

What specific costs are included in supplier costs eligible for forgiveness?
Supplier costs include expenditures to a supplier pursuant to a contract, purchase order, or order for goods in effect prior to taking out the loan that are essential to the recipient’s operations at the time at which the expenditure was made. Supplier costs of perishable goods can be made before or during the life of the loan.

What costs are included in group benefits costs eligible for forgiveness?
Group benefits costs include employer paid group benefits for health, life, disability, dental and vision insurance.

Are worker’s protection costs from March of 2020 eligible for forgiveness?
Costs included on your forgiveness application must have been paid or incurred during the loan’s Covered Period.

Do worker’s protection costs include costs associated with allowing employees to work remotely? (such as costs for VPN set-up, video conferencing subscriptions, etc.)
Our interpretation of the SBA’s guidance is that these costs would be considered PPE costs and are eligible for forgiveness.

If I received a PPP loan in 2020, am I eligible to include costs for the new cost categories eligible for forgiveness in my forgiveness request?
Yes. All new requirements that resulted from the new legislation are applied retroactively to all loans issued in 2020, as long as forgiveness has not already been received.

Are premiums paid for the owner’s health benefits eligible for forgiveness?
Benefits costs for owners are not eligible for forgiveness, unless indirectly part of a general employee benefit plan.

Are employee compensation caps of an annualized salary of $100,000 still applied to forgiveness amount calculations?
Yes. Only compensation up to an annualized salary of $100,000 should be included in the forgiveness calculation. Benefits costs are not included in the $100,000 threshold.

If we did not include owner compensation in our original loan calculation, can we request forgiveness for owner compensation, or is it limited to payroll used to calculate the loan amount?
Borrowers may use the PPP funds on any cost categories eligible for forgiveness. In order to achieve full forgiveness, at least 60% of the loan must be used on eligible payroll costs.

Is forgiveness still based on a minimum expenditure of 60% of the funds on payroll?
Yes. The 60% payroll requirement in order to achieve full forgiveness still applies to existing, new and second draw PPP loans.

What is the purpose of the revised PPP loan Form 3508S and when should borrowers use Form 3508S?
The revised PPP loan Form 3508S provides a streamlined forgiveness application for all PPP loans of $150,000 or less, not requiring calculations to be shown, and less supporting documentation. All borrowers with loans $150,000 or less should use this form only going forward

Are borrowers eligible to apply for forgiveness using the streamlined application for loan less than $150,000 even if their first and second draw loans together exceed $150,000?
Yes. First and second draw loans are considered separate loans, so forgiveness will be applied for separately.

Is the new simplified application different than the EZ form? Will the EZ form still be available for use? The new simplified application is only for borrowers who received loans less than $150,000. The EZ form will still be available for borrowers to apply for forgiveness, as long as the requirements to use the EZ form are met.

To receive forgiveness for supplier costs, does a written contract need to be provided showing the agreement with the supplier?
The SBA has not provided guidance on the specific documentation required to support these expenditures.

What is required to be in the 1-page certification to apply using the streamlined application for loans under $150,000?

A borrower shall receive forgiveness if a borrower signs and submits to the lender a certification that is not more than one-page in length including:

  • A description of the number of employees that the borrower was able to retain because of the covered loan
  • The estimated total amount of the loan spent on payroll costs
  • The total loan amount

The borrower must also attest that the borrower accurately provided the required certification and complied with program requirements.

Are borrowers required to submit supporting documentation with the Form 3508S streamlined application? Borrowers are not required to submit any supporting documentation with the application, however, must maintain documents that could be requested during an audit or SBA loan review. Borrowers should be advised to prepare this documentation and have it ready, enabling fast response upon SBA inquiry.

Is PPP forgiveness treated as taxable income?
Forgiveness of PPP loans are not to be included as taxable income on a borrower’s tax returns.

How do the new forgiveness requirements affect non-profit organizations?
The rules are the same for non-profit organizations as for for-profit organizations.

Will forgiveness be given to second draw recipients?
Borrowers may request forgiveness for both first and second draw PPP loans.

Even with additional cost categories eligible for forgiveness, the loan amount does not change. How is it beneficial to add in new eligible costs incurred?
New cost categories allow businesses to use the funds on other expenditures that resulted from the pandemic in case the borrower was unable to spend the entirety of the loan on payroll.

Will the new requirements affect applications that have already been submitted to the Bank for forgiveness?
Borrowers may adjust their applications to reflect the new program requirements as long as the application has not been submitted to the SBA and forgiveness has not been received.

A business already submitted their forgiveness application for a loan under $150,000, will the applicant be required to re-apply using the new streamlined application?
No. If an application was already submitted to the Bank, the applicant will not be required to resubmit a new application. However, if the application has not been submitted to the SBA and forgiveness has not been received, the borrower can resubmit their application to expedite the review process.

Can businesses include expenditures that fall under the new cost categories in their forgiveness request for a loan that was issued in 2020?
Yes. New program requirements apply to new, second draw and current PPP loans.

What is the purpose of the revised PPP loan Form 3508D?
Form 3508D should be completed for all PPP1 first draw loans received prior to 12/27/20 with applicable “covered individual” owners. Covered individuals are primary government officials who hold a “controlling interest,” or more than 20%, in the borrowing entity.

When do borrowers need to complete Form 3508D?
If a borrower already submitted a forgiveness application, the form needs to be completed and sent to the SBA no later than 1/26/20 via email. If forgiveness has not been processed, this form should be submitted along with forgiveness documentation within 30 days via the SBA platform.

Are loans under a certain amount threshold exempt from reductions to the loan forgiveness amount? Only loans of $50,000 or less are exempt from any reductions to the loan forgiveness amount. A borrower with a loan greater than $50,000 and up to $150,000 must comply with the requirements under PPP, including calculating any reduction in forgiveness amounts based on reductions in FTEs or employee salary or wages. It should be noted that reduction is waived if the borrower certifies to being impacted by government controls related to the pandemic.