Will Your Business Qualify For The 2nd Round of PPP Loans?


The new coronavirus stimulus package that just passed Congress provides for certain small businesses to apply for a second Paycheck Protection Program loan through March 31, 2021. Small businesses that have already taken out a PPP loan and used up the funds may qualify for another loan through this program. Rates are fixed at 1% with a two-year term, you can apply for up to 100% forgiveness, and the loan requirements are more restrictive than the first round of PPP funding.

Eligible businesses include small businesses, nonprofit organizations, veterans organizations, tribal businesses, self-employed individuals, sole proprietors, independent contractors, small agricultural cooperatives. Additional qualifications your business must meet include:

  • Meet the SBA size standards for its industry or the alternative PPP size standards
  • Have no more than 300 employees
  • Have had a 25% drop in revenue from 2019, which is determined as follows:
    • Established before 2019: The SBA compares your gross receipts from all quarters in 2019 and 2020 to see if there’s a year-over-year drop.
    • Established after the second quarter of 2019: The SBA compares revenue from a 2020 quarter to revenue from the third or fourth quarter of 2019.
    • Established after the third quarter of 2019: The SBA compares revenue from any 2020 quarter to the fourth quarter of 2019.
    • Established after the fourth quarter of 2019: The SBA compares your second or third quarter of 2020 revenue to revenue from the first quarter of that year.

The following types of costs would be eligible for forgiveness:

  • Payroll expenses — including group insurance plans
  • Rent
  • Mortgage interest payments
  • Purchase of software or cloud computing systems for general business operations, like tracking inventory
  • Repairs to property damage due to vandalism or looting not covered by insurance
  • Utility payments
  • Supplier costs for costs from a contract signed before you received the funds
  • Worker protection expenses to meet health and safety guidelines, like personal protective equipment

For most businesses, the Second Draw loan amount will be 2.5 times their average monthly payroll during 2019 (or 3.5 times 2019 average monthly payroll for restaurants, hotels, and certain other hospitality businesses).

Once signed into law by the President, the SBA and Treasury will provide guidance and forms for the new forgiveness rules, as well as loan applications and guidelines for second draw PPP loan borrowers. Second Draw loans will likely be available through the same lenders that offered the original PPP funding, so if you already received a loan through a lender, it might be easiest to apply through the same one again.

If you don't qualify for a Second Draw loan but received an original PPP loan, you may still be able to get additional funding. The second stimulus bill expanded the types of expenses that are eligible for PPP funding and forgiveness to include the operating expenses, property repairs, supplier costs and worker protection expenses. Contact your lender to learn how and when to apply for more funds.

Read more detailed information about the Second Draw PPP Loans at https://www.entrepreneur.com/article/362143 and What is the PPP Second Draw loan and how does it work?


DJL Accounting & Consulting Group, Inc.
1570 South Canfield-Niles Road #C102
Youngstown, Ohio 44515 

Phone:  330 779 0781



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