The Paycheck Protection Program (PPP) Second PPP loans (PPP-2) are available to first time PPP borrowers and businesses that received a PPP loan previously that meet special requirements, including:
- Have 300 or fewer employees
- Demonstrate a reduction in revenue of at least 25% between corresponding quarters in 2020 and 2019
- Must have fully spent the loan proceeds from their first PPP loan before the second PPP loan is dispersed. The first loan does not have to be forgiven before applying for round 2.
Similar to the first round of PPP loans, to be eligible for forgiveness, spending must be comprised of at least 60% on payroll costs (compensation, health, retirement and state and local payroll taxes) over a Covered Period of up to 24 weeks.
Second Draw PPP Loan have the same general loan terms as their First Draw PPP Loan.
Second Draw PPP Loans can be used to help fund payroll costs, including benefits. In addition, funds can also be used to pay for:
- mortgage interest,
- rent,
- utilities,
-
worker protection costs related to COVID-19, (New)
-
uninsured property damage costs caused by looting or vandalism during 2020, (New)
-
and certain supplier costs and expenses for operations. (New)
Full Forgiveness Terms
Second Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:
- Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan;
- The loan proceeds are spent on payroll costs and other eligible expenses; and
- At least 60 percent of the proceeds are spent on payroll costs.
Additional Eligibility guidelines for 2nd Draw PPP Loans:
- Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
- Has no more than 300 employees; and
- Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
Loan Amounts
- The maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million.
- For borrowers in the Accommodation and Food Services sector the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.
- There is a cap on combined PPP1 and PPP2 loans of $10 million.
Application Deadlines:
Application portals will open on up January 13, 2021 for community lenders; shortly thereafter they will open for all participating financial institutions. Borrowers can apply for a Second Draw PPP Loan until March 31, 2021, through any participating lender. A list of lenders participating in the program can be found here: Lender List.
A complete list of forms and guidelines, including a copy of the second draw loan application can be found here.
