When to Apply for PPP Loan 2? | Getting PPP 1 and PPP 2 in 2021 | Wait 8 Weeks?

As of March 30, 2021 the SBA says you have to wait at least 8 weeks from getting your PPP first draw funds to be able to apply for PPP loan second draw, but we have seen otherwise.

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DISCLAIMER
This video is intended for education purposes and should not be taken as legal or tax advice. You should consult with your financial professionals about your unique financial situation before acting on anything discussed in these videos. Freedomtax Accounting and Multiservices Inc. is providing educational content to help small business owners become more aware of certain issues and topics, but we cannot give blanket advice to a broad audience. Freedomtax Accounting and Multiservices Inc. or its members cannot be held liable for any use or misuse of this content.

Requirements if You Already Have a PPP1 Loan

To get a PPP2 loan from an approved SBA Lender, if you already have an existing PPP loan (“PPP1”), you:

Must have fewer than 300 employees, including “affiliates” (for hotels and restaurants this limitation is calculated on a per-physical-location basis).

Must be in operation on February 15, 2020.

Cannot be publicly traded, be primarily engaged in political advocacy or lobbying, or have significant ownership by residents of China (PRC).

Must have used (or have a plan to use) all of their original PPP1 loan for approved expenses.

Must be able to show a 25% reduction or more in gross revenue in any quarter in 2020 compared to the same quarter in 2019. New businesses, that were not in business for the entire 2019 year, but were in business before February 15, 2020, can use quarterly revenue for a portion of the year.

What Are The Major Changes to The PPP Loans?

As with PPP1 loans, PPP2 loans give qualified businesses a loan of up to 2.5 times their average monthly payroll costs, either determined by the calendar year in 2019, 2020, or by the 12 months prior to the date the application is submitted. Hospitality or food service businesses with a NAICS code beginning in 72 may receive up to 3.5 times their average monthly payroll costs.

However, one of the biggest changes is the maximum loan amount, which is down from $10 million in 2020 to $2 million for second-time loan recipients.

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