## Small Business Owners and Second PPP Loans: Eligibility and Application Process
The Paycheck Protection Program (PPP) was established as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020. The program was designed to provide financial support to small businesses impacted by the COVID-19 pandemic. Small businesses and non-profit organizations were eligible to receive loans to cover certain expenses, including payroll costs, rent, and utilities.
The initial round of PPP funding was exhausted quickly, prompting the passage of the PPP Flexibility Act on June 5, 2020. This Act made changes to the PPP program, including extending the application deadline and expanding the use of loan funds.
In December 2020, the PPP was authorized for a second round of funding under the Consolidated Appropriations Act, 2021. This second round of funding is available to eligible small businesses and non-profit organizations that have been affected by the COVID-19 pandemic.
### Eligibility for a Second PPP Loan
To be eligible for a second PPP loan, small businesses and non-profit organizations must meet the following criteria:
– Have fewer than 300 employees
– Have experienced a 25% reduction in gross receipts in any quarter of 2020 compared to the same quarter in 2019
– Have been in operation on February 15, 2020
– Not have received a PPP loan in excess of $2 million in the first round of funding
Additionally, businesses that received a PPP loan in the first round are eligible for a second loan if they meet the following criteria:
– Used all of the funds from their first PPP loan
– Can demonstrate that they still have a need for additional funding due to the ongoing economic impact of the COVID-19 pandemic
– Have not fully recovered to pre-pandemic levels of business activity
### Application Process for a Second PPP Loan
Small businesses and non-profit organizations can apply for a second PPP loan through an approved lender. The application process is similar to the process for the first round of PPP loans.
The following steps outline the application process for a second PPP loan:
1. **Gather the necessary documentation.** This includes financial statements, tax returns, and proof of reduced gross receipts.
2. **Contact an approved lender.** You can find a list of approved PPP lenders on the Small Business Administration (SBA) website.
3. **Complete the PPP loan application.** The application form is available on the SBA website.
4. **Submit the application to the lender.** Once you have completed the application, submit it to the lender along with the required documentation.
5. **Wait for a decision.** The lender will review your application and make a decision on whether to approve your loan.
### Use of Second PPP Loan Funds
The proceeds of a second PPP loan can be used to cover the same expenses as the first PPP loan, including:
– Payroll costs
– Rent and utilities
– Mortgage interest payments
– Certain other operating expenses
### Repayment of Second PPP Loan
The terms of repayment for a second PPP loan are the same as the terms for the first PPP loan. The loan has a maturity of five years and an interest rate of 1%. The loan is not due until two years after the date of disbursement.
### Forgiveness of Second PPP Loan
The second PPP loan is also eligible for forgiveness. The forgiveness process is similar to the forgiveness process for the first PPP loan. To be eligible for forgiveness, the borrower must use the loan proceeds to cover eligible expenses and maintain the same number of employees as of December 31, 2019.
### Conclusion
The second round of PPP funding is a valuable resource for small businesses and non-profit organizations that have been affected by the COVID-19 pandemic. Eligible businesses and organizations should consider applying for a second PPP loan to help cover their ongoing operating expenses.
## Frequently Asked Questions
### **Who is eligible for a second PPP loan?**
Small businesses and non-profit organizations with fewer than 300 employees and a 25% reduction in gross receipts in any quarter of 2020 compared to the same quarter in 2019 are eligible for a second PPP loan.
### **What is the maximum amount of a second PPP loan?**
The maximum amount of a second PPP loan is $2 million.
### **How do I apply for a second PPP loan?**
You can apply for a second PPP loan through an approved lender. The application process is similar to the process for the first round of PPP loans.
### **When is the deadline to apply for a second PPP loan?**
The deadline to apply for a second PPP loan is March 31, 2021.
### **What are the terms of repayment for a second PPP loan?**
The terms of repayment for a second PPP loan are the same as the terms for the first PPP loan. The loan has a maturity of five years and an interest rate of 1%. The loan is not due until two years after the date of disbursement.
### **Is the second PPP loan eligible for forgiveness?**
Yes, the second PPP loan is eligible for forgiveness. The forgiveness process is similar to the forgiveness process for the first PPP loan. To be eligible for forgiveness, the borrower must use the loan proceeds to cover eligible expenses and maintain the same number of employees as of December 31, 2019.