In this 3-minute read
- How long does it take to get my second draw PPP loan?
- How long does it take to apply for second draw PPP loans?
- What you need, and don’t need, to apply and qualify for second draw loans
- Can I apply for a second draw PPP loan if I haven’t spent all of my first loan?
- How long does it take for my second draw PPP loan to be forgiven?
The Paycheck Protection Program was initially founded as part of the CARES act of 2020 to help America’s small businesses and workers survive the devastating financial impact of the COVID-19 pandemic. For 2021 there are lots of updates, and the PPP loan program has received new funding, new rules, and even a “second draw” PPP loan for qualifying businesses, non-profits, independent contractors, self-employed individuals, and sole proprietors.
A lot of people are wondering how long it takes to get their second draw PPP loan, so let’s go over some basics.
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How long does it take for my PPP second draw loan to be funded?
Once your second draw PPP loan is approved by the SBA, by law your lender has 10 calendar days to ensure that the funds are released to your account. This is the same time period as for first-draw PPP loans. We’ve helped hundreds of thousands of people with their PPP loans and the majority of reports we get are that their loans are funded much sooner, usually within a few days of SBA approval. We’re generally seeing loans funded within 10-20 days after application.
Is it harder or more time-consuming to apply for and qualify for second draw PPP loans?
The rules and application for all PPP loans have been simplified, particularly for smaller loan amounts, but it’s still a bit more complicated to get a second draw PPP loan than it is for your first draw.
What you DON’T NEED for a second draw PPP loan:
- Employees
- Collateral
- Credit check
- Business bank account
- LLC or official legal entity
What you DO NEED to qualify for a second draw PPP loan:
To be eligible for a second draw loan, you must certify (in addition to the requirements for PPP eligibility in general) that:
- You have fewer than 300 employees, and
- You have used, or will use all of your first-draw PPP funds according to the rules, and will spend it all before your second draw loan is funded, and
- You experienced a 25% reduction in revenue in (at least one month in) 2020 compared to 2019
That last one is going to take a bit more documentation, and there are a couple of ways you can prove the required drop in earnings.
Read about the documentation and methods for demonstrating your 25% revenue reduction for second draw PPP loan eligibility in our PPP second draw FAQs.
In addition to the additional second draw PPP eligibility requirements, you also will need to provide your “PPP first draw SBA loan number,” and it may take a bit of extra time getting that number from your lender if you don’t have it available from your first draw PPP loan documentation. So that part of the second draw PPP loan application process can take take a little longer.
I didn’t spend all of my first PPP loan money… can I still get a second draw PPP loan?
As long as you certify that you have spent, or will spend, the full amount of your first PPP loan on eligible expenses before your second draw PPP loan is funded, you can still qualify for a second draw loan.
In other words, the SBA wants some assurance that you spent your first draw loan responsibly and will be eligible to receive forgiveness on that loan, as well as for your second draw PPP loan in the future.
If you’re an independent contractor, sole proprietor, eligible self-employed individual, you are legally permitted to pay yourself using your PPP funds, since approved payroll costs include your own salary.
Read more on how to spend your PPP funds.
How long does it take to get my first or second draw PPP loan 100% forgiven?
If you follow the rules and spend your PPP funding on eligible expenses, including at least 60% on payroll expenses, you can apply for forgiveness on the same day your selected “covered period” ends, either 8 or 24 weeks after you receive your PPP funding. See our PPP forgiveness FAQs for more info!
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