The SBA has rolled out a new round of federal loans for businesses impacted by COVID-19, one of which is the Paycheck Protection Program (PPP). The new PPP has $284.5 billion available, including $35 billion for first-time loans, and has several important differences from the original PPP. One addition is the addition of Second Round funding for businesses that have previously received a PPP loan.


Borrowers are eligible for a second-draw PPP loan of up to $2 million, provided they have:

  • 300 or fewer employees.
  • Used or will use the full amount of their first PPP loan on eligible expenses on or before the expected date for the second PPP loan to be disbursed to the borrower.
  • Experienced a revenue reduction of 25% or more in all or part of 2020 compared with all or part of 2019.

Loan Amounts

  • In general, PPP borrowers may receive a loan amount of up to 2.5 times their average monthly payroll costs (with a cap per employee of $100,000 annualized) in 2019, 2020, or the year prior to the loan.
  • Hospitality businesses (such as hotels and restaurants) can receive up to 3.5 times their average monthly payroll costs.
  • Seasonal employers utilize average monthly payroll costs for a 12-week period between February 15, 2019 and February 15, 2020.  

Loan Forgiveness

PPP borrowers can have loans forgiven if the funds are used on eligible costs. As with the first round of the PPP, the costs eligible for loan forgiveness in the revised PPP include payroll, rent, covered mortgage interest, and utilities. In addition, the following costs are now eligible:

  • Covered worker protection and facility modification expenditures, including personal protective equipment, to comply with COVID-19 federal health and safety guidelines.
  • Covered property damage costs related to property damage and vandalism or looting due to public disturbances in 2020 that were not covered by insurance or other compensation.
  • Expenditures to suppliers that are essential at the time of purchase to the recipient’s current operations.
  • Covered operating expenditures, which refer to payments for any business software or cloud computing service that facilitates business operations; product or service delivery; the processing, payment, or tracking of payroll expenses; human resources; sales and billing functions; or accounting or tracking of supplies, inventory, records, and expenses.

To be eligible for full loan forgiveness, PPP borrowers will have to spend no less than 60% of the funds on payroll over a covered period between eight or 24 weeks.

Minority, underserved, veteran, and women-owned businesses

The Economic Aid Act provides set-asides for new and smaller borrowers, for borrowers in low- and moderate-income communities, and for community and smaller lenders. Detailed set-asides are available on the SBA website.

To promote access to capital, initially only community financial institutions will be able to make Second Draw PPP Loans on Wednesday, January 13.  

More information is available at: