Payroll Protection Program Loans, Round 2

Published by Heather on

Payroll Protection Program Loans, Round 2

Section 311 of the Consolidated Appropriations Act (“Act”) introduced the PPP “Second Draw Loans” (PPP2).  It also expanded the list of qualified PPP eligible expenses while narrowing the definition of which businesses will be eligible for a 2nd PPP loan.

The Act extended the deadline for businesses to apply for a PPP or PPP2 loan to March 31, 2021 or until funds are exhausted.

First time borrowers eligible for the original PPP may be able to apply for a loan through the extended deadline. This includes borrowers who had an original PPP loan but did not receive the full amounts for which they were eligible and borrowers who had chosen to return their original PPP loan to the lender.

In order to receive a PPP2 loan, in general, the business must have less than 300 employees, had at least a 25% reduction in gross receipts in any quarter in 2020 (compared to the respective quarter in the prior year), and have or will use all of their original PPP loan proceeds. The Act expanded the list of businesses/industries eligible for the loan as well as providing a list of businesses/industries that are barred from the 2nd round of loans.

Additional guidance from the Treasury Department and Small Business Administration is expected in January 2021.

Here is a link to the text of the bill: Consolidated Appropriations Act, 2021 (  Section 311 starts on page 2064 of the nearly 5,600 page bill.