Paycheck Protection Program Second Draw Application Extended
The Small Business Administration’s (SBA) Paycheck Protection Program (PPP) Second Draw Loan program closes on May 31, 2021 and interested business owners hit hard by the pandemic owners should consider applying for assistance.
The program was originally set to expire on March 31, 2021, but lawmakers approved the extension to provide an extension for PPP applicants to file and an added 30 days for the SBA to finish processing applications.
Who should apply?
The program is for businesses that have been critically affected by the pandemic. Business owners must meet the following requirements to apply for the PPP Second Draw:
- Employ 300 or less;
- Demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020; and
- Have used the first PPP loan properly, if applicable. Business owners who took the first PPP loan are eligible as long as they have used (or are using) the full amount for authorized expenses.
The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, and direct marketing organizations, among other types of entities.
What can you use PPP funds for?
Business owners may use PPP funds to fund at least 60% of payroll and pay rent, utilities, and mortgage loan payments. The SBA allows business owners to use the second loan on additional expenses, including:
- Supplier costs on existing contracts and purchase orders, including the costs for perishable goods at any time; and
- Costs related to worker protective equipment, adaptive costs, and technology operations expenditures.
How do you apply for the Second Draw loan?
The SBA does not administer the loans directly, so business owners will need to submit application forms to participating lenders. To find a lender, please visit the SBA website.
When can you use the funds?
PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs.
Help is available