How to Obtain a Second Small Business PPP Loan  


  By Michelle Loredo

The second round of the Paycheck Protection Program is now open. It aims to continue to help small businesses during COVID-19. The program will accept applications by March 31, 2021. If you received the PPP loan from the first round, you could qualify for the second round.   

We have put together everything you need to know about the second round of the small business loan and what you need to apply.  

Who Qualifies?

The second round of the PPP aims to help small business owners that have used up all the aid given in the first round and need help, have less than 300 employees, and if your business can demonstrate that you had at least a reduction of 25 percent in the total amount received between 2019 and 2020.  

The SBA strives to help minority-owned businesses and underserved communities with this round of the PPP. To help boost this population, the SBA will only accept applications from small lenders and eligible business owners at the beginning of the term. Other applications will be accepted shortly after. 

What Can the PPP Loan be Used For?

The PPP loan can help fund many distinct aspects of your business. Here are a few examples:

Applicants are not required collateral or personal guarantees. Small business applicants that receive the loan will not receive any hidden fees.

What are the Terms and Rates?

The terms and rates for PPP stayed the same. What did change was the maximum amount a small business can receive. Compared to the first draw, the loan is 2.5x of the payroll costs in 2019-2020 payroll costs. Forgiveness for the loan depends on the business retention of employees or quickness in the rehiring process. The loan will be forgiven if it is used for payroll costs, interest in mortgages, rent and utilities with at least 60 percent used on payroll. If a business does not let go of its employees, the SBA will forgive proceeds that would have covered the first eight weeks of payroll and other expenses covered after receiving the loan. All of this must be done after eight-to-24 weeks (about 5 and a half months) after aid disbarment.  

What Documents to Submit and Where to Submit to?  

To start the process, the PPP application form needs to be submitted to an existing SBA 7(a) lender or through federal insurance institutions (credit unions) and participating Farm Credit System institutions. You can also submit your application to Community Development Financial Institutions.