# Block, Inc. (formerly Square, Inc.) — FY2020 Form 10-K — PPP extract

**Faithful extract of the Paycheck Protection Program passages, as filed.**

- **Filer:** Square, Inc. (now Block, Inc.) — CIK 0001512673
- **Form:** Annual report (Form 10-K)
- **Fiscal year ended:** December 31, 2020
- **Filed:** February 23, 2021
- **Accession number:** 0001512673-21-000008
- **Primary document:** `sq-20201231.htm`
- **Filing index:** https://www.sec.gov/Archives/edgar/data/1512673/000151267321000008/
- **Primary 10-K document:** https://www.sec.gov/Archives/edgar/data/1512673/000151267321000008/sq-20201231.htm
- **EDGAR filing list (all 10-Ks):** https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001512673&type=10-K

Quotations below are transcribed verbatim from the as-filed HTML document (HTML tags stripped, whitespace normalized). Page markers that appear inline in the source (e.g. "56") are an artifact of the document's running page numbers and are preserved where they fall.

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## 1. Headline figure — Business / COVID-19 response section

> "As a participant in the Paycheck Protection Program (PPP), we distributed loans to Square sellers. As of December 31, 2020, Square Capital had facilitated approximately $857 million of PPP loans, excluding cancelled loans, providing access to a financial lifeline to over 80,000 small businesses."

## 2. Square Capital lifetime context

> "Since its public launch in May 2014, Square Capital has facilitated more than 1.2 million loans and advances, representing more than $8.1 billion. This includes approximately $857 million in Paycheck Protection Program (PPP) loans, excluding cancelled loans, to more than 80,000 sellers, which Square Capital facilitated in 2020."

## 3. The facilitation model and the year-ended figures (MD&A / Liquidity)

> "In April 2020, we were licensed to participate in the Paycheck Protection Program (“PPP”) administered by the Small Business Administration (“SBA”) that was enacted in March 2020 under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") in response to the COVID-19 pandemic. The PPP is intended to provide relief to eligible businesses impacted by COVID-19, and to incentivize businesses to keep their workers on the payroll. For the year ended December 31, 2020, we facilitated the issuance of $857 million of PPP loans, excluding cancelled loans, through an external bank partner, of which we sold $399.0 million to an investor. These loans are guaranteed by the U.S. government. Additionally, the loans are eligible for forgiveness if the borrowers meet certain criteria. As of December 31, 2020, approximately $46.4 million in PPP loans held for sale on our consolidated balance sheet have been forgiven by the SBA. In February 2021, we began participating in the second round of the PPP program by accepting applications from certain existing Square customers who received a loan in the spring of 2020."

*Note on the "external bank partner": the 10-K does not name the partner in this passage. Square's own and press disclosures identify the partner as Celtic Bank.*

## 4. Revenue-recognition treatment (Square Capital was the facilitator/servicer, not the lender of record)

> "In April 2020, Square Capital was licensed to participate in the Paycheck Protection Program (“PPP”) administered by the Small Business Administration. These loans are guaranteed by the U.S. government and are eligible for forgiveness if the borrowers meet certain criteria."

(Appears in the discussion of how Square engages third-party investors to service loans and earns servicing/facilitation revenue.)

## 5. Risk-factor framing

> "Our participation in government relief programs set up in response to the COVID-19 pandemic, such as facilitating loans to businesses under the Paycheck Protection Program or unemployment benefits and stimulus payments to individuals through Cash App, may subject us to new risks and uncertainties. ... Square Capital is an approved participant under the Paycheck Protection Program (“PPP”) administered by the Small Business Administration (“SBA”) and enacted in March 2020 under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") in response to the COVID-19 pandemic. Recently, the PPP was extended until March 31, 2021 and an additional $284 billion was allocated to fund a second round of PPP loans."

Forward-looking-statements section also flags: "our potential exposure as a participant in the Paycheck Protection Program ("PPP") and its effect on our liquidity and financial results".

## 6. Paycheck Protection Program Liquidity Facility (PPPLF) — Federal Reserve funding

> "On June 2, 2020, we entered into the Paycheck Protection Program Liquidity Facility agreement with the Federal Reserve Bank of San Francisco (“First PPPLF Agreement”) to secure additional credit in an aggregate principal amount of up to $500.0 million."

> "In June 2020, we entered into the Paycheck Protection Program Liquidity Facility agreement with the Federal Reserve Bank of San Francisco ("First PPPLF Agreement") to secure additional credit collateralized by PPP loans. As of December 31, 2020, $464.1 million of PPPLF advances were outstanding and collateralized by the same value of PPP loans."

> "On June 2, 2020, Square Capital was approved to borrow under the PPPLF with the Federal Reserve Bank of San Francisco, at an annual interest rate of 0.35%. The PPPLF extends credit to eligible financial institutions that have originated or purchased PPP loans. Advances under the PPPLF are non-recourse and are secured by a pledge of PPP loans held by Square Capital."

> "On January 29, 2021, Square Capital delivered a Paycheck Protection Program Liquidity Facility Letter of Agreement to the Federal Reserve Bank of San Francisco pursuant to which Square Capital intends to request additional advances under the PPPLF, collateralized by loans from the second round of the PPP program. As of February 23, 2021, approximately $376.3 million of PPPLF advances were outstanding and collateralized by the same value of the PPP loans."

PPPLF exhibits incorporated by reference: Exhibit 10.24 "Paycheck Protection Program Liquidity Facility Letter Agreement, dated as of June 2, 2020" (8-K, filed June 3, 2020); Exhibit 10.25 "Paycheck Protection Program Liquidity Facility Letter of Agreement, dated as of January 29, 2021" (8-K, filed February 3, 2021).

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## What the FY2020 10-K does and does not say (for the archive)

**Says, with figures:**
- ~$857 million of PPP loans facilitated in 2020, excluding cancelled loans, to over 80,000 small businesses / sellers (the company's own December 31, 2020 accounting).
- Facilitated "through an external bank partner" — confirming the partner-bank facilitation model (partner not named in the 10-K; identified elsewhere as Celtic Bank).
- $399.0 million of those loans sold to an investor.
- ~$46.4 million in PPP loans held for sale had been forgiven by the SBA as of December 31, 2020.
- Licensed/approved to participate in April 2020; began second-round (second-draw) participation in February 2021, limited to certain existing Square customers from spring 2020.
- Federal Reserve PPPLF funding: $464.1 million outstanding at December 31, 2020 (up to $500.0 million initial facility, later raised toward $1.0 billion); $376.3 million outstanding as of February 23, 2021; non-recourse, 0.35% rate.

**Does not say:**
- It does not name the external bank partner (Celtic Bank) in the PPP disclosure.
- It does not break out PPP facilitation fee revenue as a discrete line item, nor a per-loan average loan size (the ~$7,000 average and the 76,000+/all-50-states framing come from Square's June 15, 2020 press release, an interim figure).
- It does not mention Jacqueline Reses by name in connection with PPP, nor does it source any lobbying of, or communication with, Treasury Secretary Steven Mnuchin.

**Reconciliation note:** the 10-K's full-year figure (~$857M / 80,000+, as of Dec. 31, 2020) is larger than the company's interim June 15, 2020 press tally (~$820M / 76,000+) because the 10-K captures the full 2020 facilitation window. Both differ from the SBA loan-level FOIA total attributed to Square Capital as originating lender (~72,564 loans / ~$0.68B), which reflects loan-level attribution and the partner-bank-of-record treatment.

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*Extract prepared for the Pandemic Darlings archive. Source: U.S. Securities and Exchange Commission, EDGAR. Retrieved from the as-filed HTML 10-K at the URL above (accession 0001512673-21-000008). This file is a sourced extract, not the full multi-megabyte filing.*