Paycheck Protection Program (PPP) Second Draw

Different eligibility requirements and loan terms will apply if you are a first time PPP borrower. For First Draw PPP guidance, please click here.

The Paycheck Protection Program (PPP) is a forgivable loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

Eligibility 

  • Must be a business, certain non-profit organizations, housing cooperatives, veterans’ organizations, tribal businesses, self-employed individuals, sole proprietors, independent contractors, and small agricultural co-operatives;
  • Must have been in business as of February 15, 2020;
  • Employ no more than 300 employees cumulative of all locations;
  • NAICS code 72 (Accommodations and Food Services) and eligible news organizations 300 employees by physical location
  • Received and have used or will use the full amount of their first pull PPP by PPP second pull disbursement on eligible expenses;
  • Demonstrate at least a 25% reduction in gross receipts Q1, Q2, Q3, Q4 2020 relative to the same 2019 quarter;
  • And have not or will not receive a Shuttered Venue Operator Grant.

Loan Terms 

  • Loan amount of up to 2.5X the average monthly payroll costs in the one year prior to the loan or the calendar year.
  • Entities in NAICS code 72 (Accommodations and Food Services) may receive loans of up to 3.5X average monthly payroll costs.
  • No loan can be greater than $2 million
  • No collateral required
  • 1% Interest rate
  • 5 year maturity

Eligible Expenses 

  • Payroll – salary, wage, vacation, parental, family, medical, or sick leave, health benefits
  • Mortgage interest – as long as the mortgage was signed before February 15, 2020 
  • Rent – as long as the lease agreement was in effect before February 15, 2020 
  • Utilities – as long as service began before February 15, 2020 
  • Operations expenditures – Payment for any software, cloud computing, and other human resources and accounting needs. 
  • Property damage costs – Costs related to property damage due to public disturbances that occurred during 2020 that are not covered by insurance.
  • Supplier costs – 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. 
  • Worker protection expenditure – Personal protective equipment and adaptive investments to help a loan recipient comply with health and safety guidelines related to COVID-19. This includes costs associated with outdoor dining.
  • Employer-provided group insurance benefits- Clarity provided that benefits will be included in payroll costs for the first and second draw. This includes group life, disability, vision, or dental insurance.

Additional Information 

  • A $15 billion set-aside (initial and second draw) for lending through community financial institutions, including CDFIs and MDIs was established to increase access for minority-owned and other underserved small businesses and nonprofits.
  • A $15 billion and $25 billion for first draw and second draw PPP loans, respectively, set aside was created for borrowers with a maximum of 10 employees or for loans less than $250,000 to borrowers in low-or moderate-income neighborhoods.
  • An EIDL Advance is no longer subtracted from the PPP forgiveness amount.
  • Forgiven PPP loans will not be included in taxable income. Deductions are allowed for expenses paid with proceeds of a forgiven PPP loan. The same applies to EIDL grants and certain loans and loan repayment assistance. 

FAQ

How do I apply?  

You can apply for a Second Draw PPP Loan from January 13, 2021, until March 31, 2021. The Paycheck Protection Program (PPP) loan portal to PPP-eligible lenders with $1 billion or less in assets for First and Second Draw applications will open January 15, 2021. The portal will fully open on January 19, 2021. 

If you wish to begin preparing your application, you can download the following PPP borrower application form to see the information that will be requested from you when you apply with a lender:

For additional information, please visit SBA.gov/PPP