Applying for the Paycheck Protection Program's Second Draw
Included in the Consolidated Appropriations Act 2021, signed by the President on Dec. 27, 2020, was a renewal of the Paycheck Protection Program, allowing for small businesses and nonprofit organizations to draw from the loan fund a second time. There have been some adjustments to the rules, though:
Organizations which have not received a First Draw PPP Loan may now apply to do so.
To apply for the Second Draw, a borrower must:
- Have previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses
- Have no more than 300 employees; and
- Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
On this last bullet point, those organizations which applied for the SC CARES Act funds will have already done the math to determine a loss in gross receipts in the spreadsheet for that application.
Second Draw applications will be open from January 13, 2021 until March 21, 2021, with Community Financial Institutions (CFIs) having the first crack at it. Larger banks will have access this week (of Jan 18).
If your organization is looking to apply for a second draw, it is recommended to start with the same lender with whom your organization received the first draw.
Resources and more information:
- SBA Landing Page
- CommunityWorks - PPP Updates
- How to Calculate Revenue Reduction and Maximum Loan Amounts Including What Documentation to Provide, SBA.
- Shuttered Venue Operator Grant Program Webinar Recording, SBA
- Our friends at SCACED and South State Bank are producing a 2-part webinar series on applying for PPP!
More info to be added here as it is received!