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Jason Mock

Eligible businesses may apply for a second draw PPP loan

Wednesday, January 13, 2021

Last month, Congress approved, and President Trump signed the Coronavirus Stimulus bill into law. The Coronavirus Stimulus bill is a $900 billion package designed to aid American families and small businesses. This package included $284 billion for the Paycheck Protection Program (PPP). Businesses that already received a PPP loan will be eligible for the second loan, called “Second Draw PPP.” This past Monday, Jan. 11, the application was made available on the SBA website. 

Second Draw PPP is set up to help small businesses that have been hit hard by the pandemic. Businesses who would like to apply for the PPP second draw must employ 300 or fewer employees and have used or will use the full amount of their first PPP loan. A business will have to show at least a 25% reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter. 

Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

The maximum loan amount for the Second Draw PPP is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million. If a borrower falls under the accommodation and food services sector and uses the North American Industry Classification System (NAICS) NAICS 72, the maximum loan amount is 3.5x. The monthly 2019 or 2020 payroll costs up to $2 million.

Businesses can apply for the Second Draw PPP loan from January 13, 2021, until March 31, 2021. I encourage all businesses to consider applying for the Second Draw PPP loan. If you applied back in the spring of 2019, you probably have the process down, but if this is your first time applying, reach out to your local banker and talk with them about this opportunity and make sure you have everything in place before applying for the loan. For more information about the loan, please visit

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