Unexpected Capabilities. Unmatched Service.

PPP2: What Small Businesses Need to Know About This Round of Loans

The $669 billion Paycheck Protection Program (PPP) was created back in March 2020, when Washington passed the CARES Act to counter some of the economic damage done by COVID-19.

But as we all know, the pain didn’t stop in March. In fact, it still hasn’t stopped. And that’s why more recently, Congress authorized another $284 billion in PPP subsidized loans (dubbed “PPP2”) to target the nation’s neediest small businesses.

If you’re a small business owner and still find yourself in dire economic straits, here’s what you need to know about the second round of the Paycheck Protection Program:

PPP2: What You Need to Know

When Does It Begin?

First-time borrowers gain access starting Jan. 11. The PPP2 opens up to “second-draw” borrowers (those who took out a loan during the first round) on Jan. 13.

Who Is Eligible?

Eligible first-time borrowers include private businesses, independent contractors, 501(c)(3) nonprofits, as well as certain housing cooperatives, news organizations, 501(c)(6) organizations and Economic Injury Disaster Loan recipients. These organizations must have 500 or fewer employees, though some companies with more than 500 employees might apply if they meet other U.S. Small Business Administration size standards (listed here). If you applied for a loan during the first round and were rejected, you can still apply in this second round.

Second-draw borrowers have additional requirements. They must have 300 or fewer employees, and they must be able to show that revenues have decreased at least 25% year-over-year in 2020 for at least one quarter. (For instance, if your Q3 2020 revenue is 28% lower than your Q3 2019 revenue, you qualify.)

How Much Money Will My Business Receive?

How much your business will qualify for will be determined by your company’s specifics. But PPP2 loans are capped at $2 million, versus $10 million during the first round.


PPP2 loans are forgivable, provided you meet a few requirements. You must spend at least 60% of PPP2 loan funds on payroll during the “covered period,” which can be set for either eight or 24 weeks. The rest can be spent on “eligible costs.”

Eligible Costs

These costs include things like “certain mortgage expenses, rent and utility payments,” but have been expanded for PPP2. Some of the new eligible costs include spending on personal protective equipment or other investments helping a loan recipient comply with COVID health and safety guidelines, or spending not covered by insurance that went toward fixing property damage due to public disturbances in 2020.

These costs also include outlays for software, loud computing, human resources and even accounting needs.

You can find more information about PPP2 at SBA.gov.

Do You Still Need Help?

If you’re not sure whether you’re eligible for the second round of PPP2 loans, or just want to get a better handle on your financial situation, talk to the pros at McManamon & Co. We help small and mid-sized businesses with their accounting, as well as a wide range of other services, and we can evaluate your financials to determine what all of your financial options look like as 2021 gets rolling.

Get better acquainted with every financial resource that’s available to you. Call McManamon at 440.892.8900 or contact us online today.

Tags:  , , , , , , , | Posted in Financing, PPP