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ATTENTION! The paycheck protection program (PPP) loan application period ended on May 31, 2021. If your business received a PPP loan and you’re seeking information on loan forgiveness, visit Lendio’s PPP Loan Forgiveness. YOU MAY STILL QUALIFY FOR THE EMPLOYEE RETENTION CREDIT. APPLY FOR THE ERC TODAY THROUGH LENDIO.
Access your second potentially-forgivable financial safety net with a Second Draw.
Low Interest Rate
1% fixed APR for the life of the loan
Payment Deferral
Payments deferred for 10 months
Loan Forgiveness
On all qualified business expenses
PPP Second Draw allows borrowers who previously received a PPP loan to receive a second potentially-forgivable loan to be used toward payroll expenses, rent, utilities, and mortgage interest. For most borrowers, the loan can be for up to 2.5 times your monthly payroll expenses, giving you a lifetime total of 5 months worth of payroll expenses through the program. For especially impacted food service and accommodation businesses (businesses with a NAICS code starting in “72”), borrowers may be able to qualify for up to 3.5 times monthly payroll expenses.
Wondering if you’ll qualify for a PPP Second Draw loan? You may be able to secure your second potentially-forgivable loan if you meet the following criteria.
To be eligible for a Second Draw from your PPP loan, you must first meet the SBA’s criteria of an eligible entity, meaning you qualify as a(n):
The documentation required to apply for a Second Draw is the same as what is required for the First Draw. You can find document requirements, outlined by entity type, outlined below.
To expedite your application process, we recommend collecting all necessary documentation before you begin the application.
To complete the application, you’ll need:
Required for certain business types:
Apply now through Lendio to be paired with a lender. You may not have to submit additional documentation if you:
If you apply for your Second Draw through a new lender during this round, your application process will look similar to the first round. While the specifics may vary depending on where you apply, here’s a general idea of what to expect:
You can apply for a PPP Second Draw through March 31, 2021, or until funds are exhausted—whichever comes first. This reboot to the program and the creation of PPP loans came as part of the most recent PPP Flexibility Act extension, which has been colloquially referred to as “the new round of PPP” or the “PPP second round.”
Changes have been made in the 2021 extension of PPP (sometimes referred to as the “PPP second round”) to broaden how the loan can be used. In addition to the creation of the PPP Second Draw, Congress also expanded the ways the loan funds can be used.
While you still need to spend 60% of the loan on payroll-related expenses, you can now also use your PPP Second Draw to cover:
Eligible payroll expenses remain consistent with PPP First Draws and include:
Loan forgiveness guidance remains the same as guidance for forgiveness on First Draw Loans. Want more details? Find everything you need here.
If your Second Draw is not approved for loan forgiveness, you will be required to repay the loan. Second Draws come with a 1% interest rate and a maximum of 5 years for the loan term.
The SBA may review any PPP loan. If your First Draw PPP loan is under review by the SBA when you apply for a Second Draw, that application may be rejected. The SBA will try to expedite any reviews. You may be eligible to reapply once the review is complete.
To qualify for a Second Draw, a borrower must have experienced an economic loss of 25%+ in revenue (measured by a 25%+ reduction in gross receipts when comparing 2020 to 2019). Borrowers who receive a Second Draw under $150k will not need to provide documentation at the time of application, although they may need to provide documentation when they apply for loan forgiveness. Borrowers who receive a Second Draw over $150k will need to provide documentation.
Whether or not you need to submit this information to the SBA, here are the allowed methods for calculating the 25%+ reduction in revenue:
Most businesses can qualify for 2.5 times their monthly payroll expenses, as was the case with the First Draw. Businesses with a NAICS code starting in “72” can qualify for a Second Draw loan up to 3.5 times their monthly payroll costs.
Businesses that have not received a First Draw PPP loan will be unable to receive a Second Draw PPP loan. (Visit the Paycheck Protection Program (PPP) page to learn more about qualifying for a First Draw.)
Additional prohibitions include: