PPP Loans: Paycheck Protection Program, Round 2

March 1, 2021

PPP Loans are currently available through the Paycheck Protection Program, Round 2. The United States Small Business Administration (SBA) is currently accepting loan applications from small businesses working with participating lenders for the Second Draw PPP. Eligible businesses may apply for a Second Draw PPP now. Don’t miss out on this essential assistance.

Loan Details

The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with 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. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

For most borrowers, 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 (use NAICS 72 to confirm), the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.

What Businesses Qualify for PPP Second Draw

Qualifications that you should be aware of regarding a second draw:

  • Your business has fewer than 300 employees.
  • You can show a 25% revenue reduction during the first, second, or third quarter of 2020 (relative to the same quarter in 2019).

Find a PPP Lender

The SBA site provides two ways to find a participating lender:

  1. Lender Match: this free online tool connects small businesses with SBA-approved lenders. Lender Match Link.

Note: this is not useful for an SBA EIDL loan.

  1. Find a Lender Near You: this free online tool lets you search by zip code for a qualified lender near you. Find a PPP Lender Near You.

During the first round of PPP, most small businesses initially approached banks where they had existing relationships. However, some larger banks like Wells Fargo were unable to service and provide PPP loans to all existing customers. Many small businesses were able to receive PPP loans from more local banks like Republic Bank or Cross River Bank.

Other small business found success through FinTech companies like Lendio. For more on FinTech companies, read here.

When Will the PPP Extension End?

As of now, the 2021 round of PPP will be open until March 31, 2021, or until program funds are exhausted, whichever happens first.

Support for Business Hardest Hit

Congress has included three key provisions designed to support businesses that have been hit the hardest by the pandemic.

  • Restaurants, hotels, or live venues that fall under a NAICS code starting with “72” can apply for 3.5 times their monthly payroll costs on their Second Draw (use NAICS 72 to confirm).
  • Live Event and Production companies that have been forced to close may be eligible for a special grant.
  • $12 billion have been earmarked for BIPOC-owned small businesses

As of now, PPP Loans are still available from the Paycheck Protection Program, Round 2. Applying for Round 1 forgiveness is simple, if businesses spent the loan on approved expenditures. There is no reason receiving forgiveness for Round 2 will be any more difficult. The money has been made available to help small businesses survive these difficult times. It is well worth the effort to access this funding and support.