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Home Blog Yes, You Can Get a Second Draw from PPP
If you’ve been wishing the SBA would update the Paycheck Protection Program (PPP) to allow borrowers to apply for a second loan, we have some good news for you. You can now apply for a Second Draw on your PPP loan.
A Second Draw allows you to receive a second, potentially forgivable disbursal of funds.
Qualifying businesses can receive a Second Draw worth up to 2.5 times their monthly payroll expenses, the same way the loan worked for the First Draw.
Businesses with a NAICS code starting in “72” can qualify for up to 3.5 times their monthly payroll expenses. This provision was added to the PPP reboot in recognition that food service and accommodation businesses have been especially hard hit by the COVID-19 pandemic.
Eligible entities may qualify for a second PPP draw if they meet the following criteria:
You’ll need the following to apply for a PPP Second Draw:
You will be required to enter your SBA Loan number to apply for a Second Draw. This number was issued to you by the SBA when they approved your application for First Draw funds. If you are applying through the same lender, they should have your SBA Loan number on file. If not, you’ll have to retrieve it from your records.
(If you applied through Lendio during the first round, your SBA Loan number will auto-populate within the application. That’s one more thing you don’t have to worry about.)
The documentation required to validate payroll costs will remain largely the same as it was for the First Draw. If you apply through the same lender that you used for your First Draw and you used 2019 figures in your payroll calculations, no additional payroll documentation will be required.
If you are applying through a new lender or if you did not use documents from 2019 to validate payroll, then you may be required to submit additional documentation. Learn more about the types of documentation the SBA will accept for payroll validation
For loans less than $150,000, borrowers may not be required to provide documentation proving a 25%+ revenue reduction due to the COVID-19 pandemic. The borrower will instead be asked to certify that they experienced a 25%+ revenue reduction as a result of the pandemic.
For loans greater than $150,000, borrowers will be required to provide documentation demonstrating a revenue reduction of 25% or greater.
We’ve been in the business of making it easy to access business capital for going on 10 years. Here are some ways that we’ll make your Second Draw application as quick and easy as possible.
If you applied through Lendio for your First Draw, we will auto-populate as much information as possible when you apply for your Second Draw. This includes your SBA Loan number and may include additional information about your business.
We’ve used our high-tech tools to give you a seamless, speedy application process. We make the application process simple and easy. We’ve partnered with multiple lenders to give you the best chance of funding. While the requirements for a Second Draw are broad, it never hurts to have a backup plan.
The SBA reserves the right to review any PPP loan. If your First Draw is under review by the SBA, you will have to wait until the review is complete to apply for a PPP Second Draw. If you apply for a Second Draw before the review of the First Draw is complete, the application will be rejected.
Yes. To ensure that PPP Second Draw funds reach the small businesses that need them the most, the following entity types are prohibited from receiving a Second Draw:
We anticipate that these funds will go quickly. Don’t delay. Apply now.
Want help? Let us walk you through the application with this step-by-step guide.
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