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How to Get a Second PPP Loan?

If you were in business at the beginning of 2020, chances are you considered taking funding from the Paycheck Protection Program or a PPP loan. The program funded 5.2 million small businesses from the Spring to August of 2020. Whether you have spent that money or not, there is a second offering of PPP Funding now available. The first PPP loans were up to $10 million and up to 100% forgivable. Businesses that employed up to 500 people were eligible. The qualifications for the second draw of PPP loans are a little different.

A Second PPP Loan

There is a second round of PPP Funding available to small businesses. If you have already had a PPP loan from the first round of the Paycheck Protection Program funding, you can be eligible for the second round of PPP loans.

If you haven’t taken out a PPP loan yet, check out our article on PPP qualification and how to get a PPP loan.

The first round of funding helped small business owners weather 2020 with the major decrease in revenue that year brought. Now, these businesses can seek another round of PPP funding to support their business through this year.

infographic of the paycheck protection program
Above: First Draw PPP Info

How to Qualify for Second Round PPP Funding

In order to qualify for the second draw of PPP Funding, you must have already taken out a PPP loan from the first PPP draw. If you used or will use the full amount of your first PPP loan on authorized uses (see here for authorized uses) then you can qualify for a second PPP loan. The first major change in qualifications for the second round of PPP loans is that you must have 300 employees or fewer. The first round allowed 500 or fewer employees, so this will exclude some of the larger businesses. Next, the first round of PPP loans could go up to $10 million in size. The second round of PPP loans caps out at $2 million. Lastly, your revenue from 2020 must display at least a 25% decrease from the comparable quarters in 2019. This will also exclude a lot of small businesses. When profit margins are tight, even a slight dip in revenue can put your business on shaky ground.

Your revenue from 2020 must display at least a 25% decrease from the comparable quarters in 2019

How to Get More Funding on Top of a Second PPP Loan

There are no plans for a third PPP release, so once you have taken out this second draw of PPP loans you will have to find other sources of funding. Invoice factoring services are debt-free and flexible in order to help your business find solid ground and grow. Factoring can work in addition to PPP loans. You don’t have to choose between factoring or a PPP loan. You can get both and have debt-free funding options that support your business through this uncertainty. We have many clients that we encourage to take out a PPP loan because we can continue our financing to their business even if they have PPP money.

Need more money than your PPP loans?

Want to get more funding with your PPP Loan? Give us a call. We are happy to work alongside stimulus funding programs like the Paycheck Protection Program to give your business better cash flow and support.