Paycheck Protection Program Guide

April 02, 2020
Working from home

At this time, UBT is prioritizing loan applications for our Union Bank & Trust customers with established relationships (loan, deposit, trust, or investment account established prior to 3/1/2020) and applicants referred by our affiliates and partners. We will process online applications in the order they are received and are unable to guarantee that all applications will be completed should funding run out.

With the passage of the $2 trillion CARES Act to support economic recovery, significant government-sponsored financial support is on its way to help small businesses like yours. And that includes the Paycheck Protection Program, designed to help cover payroll costs, eligible business expenses, and more. We’ve come up with some pointers to help you through the application process.

What businesses are eligible?

Generally any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19. If you're self-employed or a sole proprietorship, check out our sole proprietor PPP guide. 

Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.

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.

If I believe I am eligible based on the above, is there anything that could cause me to be ineligible?

You are ineligible for a PPP loan if, for example:

  • You are engaged in any activity that is illegal under federal, state, or local law;
  • You are a household employer (individuals who employ household employees such as nannies or housekeepers);
  • An owner of 20 percent or more of the equity of the applicant is incarcerated, on probation, on parole; presently subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction; or has been convicted of a felony within the last five years; or
  • You, or any business owned or controlled by you or any of your owners, has ever obtained a direct or guaranteed loan from SBA or any other Federal agency that is currently delinquent or has defaulted within the last seven years and caused a loss to the government.
  • Unless eligible per the CARES Act, you are a business that is ineligible for SBA business loans (includes lending and investment businesses, passive businesses, life insurance companies – for a full listing see

What do I need to submit to UBT?

We are only accepting applications submitted to UBT through our online application. You can find an example of the application here to help you prepare your calculations and ensure you have all the necessary information ready. You will need information for all signers, entity documents, your business's NAICS code, and information for where funds will be deposited.

Filling out the application

If you're self-employed or a sole proprietorship, please reference the sole proprietor PPP guide. 

How do I calculate the maximum amount I can borrow?

Under the PPP, the maximum loan amount is the lesser of $10 million or an amount that you will calculate using a payroll-based formula specified in the Act, as explained below. Download the guidance for how to calculate the loan amount by business type here.

  • Step 1: Aggregate payroll costs (defined in detail below) from the last twelve months for employees whose principal place of residence is the United States.
  • Step 2: Subtract any cash compensation paid to an employee in excess of an annual salary of $100,000.
  • Step 3: Calculate average monthly payroll costs (divide the amount from Step 2 by 12).
  • Step 4: Multiply the average monthly payroll costs from Step 3 by 2.5.
  • Step 5: Add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, less the amount of any “advance” under an EIDL COVID-19 loan (because it does not have to be repaid).

What qualifies as "payroll costs?"

Payroll costs consist of compensation to employees (whose principal place of residence is the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; payment of state and local taxes assessed on compensation of employees. For self-employed, including independent contractor or sole proprietor, see  sole proprietor PPP guide. 

Is there anything that is expressly excluded from the definition of payroll costs?

Yes. The Act expressly excludes the following:

  • Any compensation of an employee whose principal place of residence is outside of the United States;
  • The compensation of an individual employee in excess of an annual salary of $100,000, prorated as necessary;
  • Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020, including the employee’s and employer’s share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be withheld from employees; and
  • Qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (Public Law 116–127).

Do I include utilities and mortgage interest or rent in calculating the maximum loan amount

No. The loan amount is based on the average monthly payroll costs for the last year. Once you receive the loan funds, you may use a portion of the loan proceeds for utilities, mortgage interest, or rent, but those amounts cannot be included in calculating the loan amount.

Do independent contractors count as employees for purposes of PPP loan calculations? 

No, independent contractors have the ability to apply for a PPP loan on their own so they do not count for purposes of a borrower’s PPP loan calculation. 

What payroll documentation does Union Bank need? 

We need you to provide us with all the information that supports your calculation. Examples of documentation include payroll reports from your payroll provider or payroll system and your IRS 941 Employer’s Quarterly Federal Tax Return.  For borrowers that do not have any such documentation, the borrower must provide other supporting documentation, such as bank records, sufficient to demonstrate the qualifying payroll amount.

How do I securely submit this application and documentation to UBT?

UBT customers can submit their application online here. Please note we will process online applications in the order they are received and are unable to guarantee that all applications will be completed should funding run out. 

Information for Loan Forgiveness

For the complete guide to loan forgiveness, visit our guide here.

What can my PPP loan funds be used for?

PPP loans may be used to pay for “forgivable purposes” which are payroll costs, mortgage interest obligations, rent obligations, and qualified utilities during the eight-week period from the date funds are disbursed to you .  SBA requires 75% of the loan to be used for payroll costs, while the remaining 25% can be used for the other expenses. 

Can my PPP loan be forgiven in whole or in part?  

Yes.  The amount of loan forgiveness can be up to the full principal amount of the loan and any accrued interest. You will not be responsible for any loan payment if:

  • You use all the loan proceeds for forgivable purposes described above and in more detail in the loan forgiveness guide; and
  • Employee and compensation levels are maintained during the 8-week period from the date funds are disbursed to you.


This information is provided as a courtesy and provides information available as of 4/21/2020.  Additional guidance received from the U.S. Treasury, Small Business Administration, or any federal regulating agency after this date may affect this information.  If you refinanced an EIDL loan into your PPP loan, that may also affect your loan forgiveness. 

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