Second Draw PPP Application

Looking for something specific? Search for it here:

How do I know if I can get a Second Draw PPP loan?

You are eligible to receive a Second Draw PPP Loan, if:

  • You received a previous PPP loan
  • You must have used the full amount of your PPP loan for authorized uses by the disbursement date of your second draw PPP loan. Note: your loan does not need to be forgiven to qualify
  • You must have 300 or fewer employees
  • Your business must have experienced a revenue reduction of 25% or greater in any quarter of 2020 relative to 2019

What is the maximum loan amount for a Second Draw PPP Loan?

  • In general, the maximum loan amount for a Second Draw PPP Loan is equal to the lesser of two and half months of the borrower’s average monthly payroll costs or $2 million, except as otherwise specified below. A borrower’s average monthly payroll costs may be based on calendar year 2020, calendar year 2019, or as otherwise specified. ‘‘Payroll costs’’ has the same meaning as in the First Draw PPP rules and is calculated in the same manner. In calculating a borrower’s payroll costs, the borrower must subtract any compensation paid to an employee in excess of $100,000 on an annualized basis, as prorated for the time period during which the payments are made or the obligation to make the payments is incurred. 
  • Except as otherwise provided, the maximum amount of a Second Draw PPP Loan is calculated as the lesser of:
    • The product obtained by multiplying: 
      • The average total monthly payment for payroll costs incurred or paid by the borrower during 2019 or 2020 (at the election of the borrower) by 2.5;
        • or $2,000,000.
  • The maximum amount of a Second Draw PPP Loan made to a borrower assigned a NAICS code beginning with 72 at the time of disbursement (that is not a seasonal employer, a new entity, a borrower with self-employment income, or a partnership is calculated as the lesser of: 
    • The product obtained by multiplying: 
      • The average total monthly payment for payroll costs incurred or paid by the borrower during either 2019 or 2020 (at the borrower’s election) by 3.5;
        • or $2,000,000.

How do I submit an application for a Second Draw PPP Loan and what documentation must I provide to demonstrate eligibility?

The applicant must submit to the lender SBA Form 2483–SD (Paycheck Protection Program Second Draw Borrower Application Form) or the lender’s equivalent form including the required certifications and the documentation.

 

At the time an applicant submits its loan application form, it must submit the following unless the documentation was submitted to the lender for the First Draw PPP Loan (i.e., the applicant used calendar year 2019 figures to determine both its First Draw PPP Loan amount and its Second Draw PPP Loan amount, and the lender for the applicant’s Second Draw PPP Loan is the same as the lender that made the applicant’s First Draw PPP Loan):

  • If the applicant is not self employed, the applicant’s Form 941 (or other tax forms containing similar information) and state quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever was used to calculate payroll), as applicable, or equivalent payroll processor records, along with evidence of any retirement and employee group health, life, disability, vision and dental insurance contributions, must be provided. A partnership must also include its IRS Form 1065 K–1s.
  • If the applicant is self-employed and has employees, the applicant’s 2019 or 2020 (whichever was used to calculate loan amount) IRS Form 1040 Schedule C, Form 941 (or other tax forms or equivalent payroll processor records containing similar information) and state quarterly wage unemployment insurance tax reporting forms from each quarter in 2019 or 2020 (whichever was used to calculate loan amount), as applicable, or equivalent payroll processor records, along with evidence of any retirement and employee group health, life, disability, vision and dental insurance contributions, if applicable, must be provided. A payroll statement or similar documentation from the pay period that covered February 15, 2020 must be provided to establish the applicant was in operation on February 15, 2020.
  • If the applicant is self-employed and does not have employees, the applicant must provide (a) its 2019 or 2020 (whichever was used to calculate loan amount) Form 1040 Schedule C, (b) a 2019 or 2020 (whichever was used to calculate loan amount) IRS Form 1099– MISC detailing nonemployee compensation received (box 7), invoice, bank statement, or book of record that establishes that the applicant is self employed; and (c) a 2020 invoice, bank statement, or book of record to establish that the applicant was in operation on or around February 15, 2020.
  • For loans with a principal amount greater than $150,000, documentation sufficient to establish that the applicant experienced a reduction in revenue must be provided at the time of application, which may include relevant tax forms, including annual tax forms, or, if relevant tax forms are not available, a copy of the applicant’s quarterly income statements or bank statements.
  • For loans with a principal amount of $150,000 or less, the applicant must submit documentation sufficient to establish that the applicant experienced a reduction in revenue as provided in subsection (c)(1)(i) of this section at the time of application, on or before the date the borrower submits an application for loan forgiveness, or, if the borrower does not apply for loan forgiveness, at SBA’s request. Such documentation may include relevant tax forms, including annual tax forms, or, if relevant tax forms are not available, a copy of the applicant’s quarterly income statements or bank statements.

 

On the Second Draw PPP Loan borrower application, an authorized representative of the applicant must make the certifications listed in the Consolidated First Draw PPP requirements, except:

  • The applicant must certify that the applicant has not and will not receive another Second Draw Paycheck Protection Program Loan; and 
  • an authorized representative of the applicant must also certify:
    • The Applicant has realized a reduction in gross receipts in excess of 25% relative to the relevant comparison time period. For loans greater than $150,000, Applicant has provided documentation to the lender substantiating the decline in gross receipts. For loans of $150,000 or less, Applicant will provide documentation substantiating the decline in gross receipts upon or before seeking loan forgiveness for the Second Draw Paycheck Protection Program Loan or upon SBA request.
    • The Applicant received a First Draw Paycheck Protection Program Loan and, before the Second Draw Paycheck Protection Program Loan is disbursed, will have used the full loan amount (including any increase) of the First Draw Paycheck Protection Program Loan only for eligible expenses.
    • The Applicant is not a business concern or entity 
      • for which an entity created in or organized under the laws of the People’s Republic of China or the Special Administrative Region of Hong Kong, or that has significant operations in the People’s Republic of China or the Special Administrative Region of Hong Kong, owns or holds, directly or indirectly, not less than 20 percent of the economic interest of the business concern or entity, including as equity shares or a capital or profit interest in a limited liability company or partnership; or
      • that retains, as a member of the board of directors of the business concern, a person who is a resident of the People’s Republic of China. 
  • The Applicant is not required to submit a registration statement under section 2 of the Foreign Agents Registration Act of 1938 (22 U.S.C. 612). 
  • The Applicant is not a business concern or entity primarily engaged in political or lobbying activities, including any entity that is organized for research or for engaging in advocacy in areas such as public policy or pol

Do I need to get my Second Draw PPP loan from my First Draw PPP loan lender?

No. You can apply for a Second Draw PPP loan from any PPP lender.

 

For all Second Draw loan applications you will need to provide your PPP First Draw SBA loan number. This is a unique 10 digit loan number assigned to your First Draw PPP loan by the lender who facilitated your First Draw loan.

 

Note: this is not the same thing as your SBA Customer Number, but is a loan number associated with your First Draw PPP Loan. Contact your First Draw lender to receive your PPP First Draw SBA Loan Number.

Where do I find my PPP First Draw SBA Loan Number?

Your PPP First Draw SBA Loan Number is the number assigned to your approved first draw PPP loan by the SBA.
This number is 10-digits long and does not contain letters or dashes.

 

Your first draw lender likely provided this to you in your loan documentation when your loan was approved or funded. If you applied through Womply for your First Draw loan then Womply Support can help you lookup this number. It’s very important that when you apply for your Second Draw loan you ensure the EIN on your application matches the one used on the First Draw loan for which the PPP First Draw SBA Loan Number relates.

 

There is no central database to lookup your PPP First Draw SBA Loan Number (eg from the SBA). Your SBA Customer Number is not the same thing as your PPP First Draw SBA Loan Number (so don’t use that in place of the correct number on your application).

What does the PPP First Draw Loan Number look like?

As part of the Second Draw Borrower application, Applicants must enter the SBA loan number of the First Draw PPP loan (i.e. the loan that was originated in 2020).

According to the SBA, PPP First Draw Loan Numbers have the following format to help borrowers identify the SBA loan number of their first PPP loan: XXXXXXXX-XX (i.e. eight numbers followed by a dash and then two more numbers).  Womply has also seen lenders providing the PPP First Draw Loan Number as 10-digits (without a dash).
The SBA has asked all PPP lenders to make SBA loan numbers easily accessible to their borrowers.

If I already received a PPP loan, does it need to be forgiven before I apply for a Second Draw PPP loan?

No, you don’t need to have applied for forgiveness or received forgiveness in order to receive a Second Draw loan. However, to receive a Second Draw loan you must certify that you spent your full first draw loan on eligible expenses. In other words, the government wants to know that you spent your first draw loan responsibly and should be eligible to receive forgiveness on that loan in the future. And they want you to attest to that fact before you get more government money.

If my First Draw loan doesn't need to be forgiven in order for me to apply for a Second Draw, can I apply for a First Draw loan and a Second Draw loan at the same time?

No. You need the PPP First Draw SBA Loan Number from your First Draw loan in order to apply for a Second Draw loan. However, as soon as your First Draw loan is issued and you have that number, you can immediately apply for a Second Draw loan as long as you meet the eligibility requirements and you can certify that you will have used all of your First Draw loan funds prior to the dispersal date of your Second Draw loan.

Will an applicant’s Second Draw PPP Loan application be affected if there are unresolved issues regarding the applicant’s First Draw PPP Loan?

(1) If a First Draw PPP Loan is under review pursuant to PPP rules and/or information in SBA’s possession indicates that the borrower may have been ineligible for the First Draw PPP Loan it received or for the loan amount received by the borrower, the lender will receive notification from SBA when the lender submits an application for guaranty of a Second Draw PPP Loan (‘‘unresolved borrower’’).

 

(2) If the lender receives notification that the Applicant for a Second Draw PPP Loan is an unresolved borrower, the lender will not receive an SBA loan number. SBA will resolve the issue related to the unresolved borrower expeditiously and will notify the lender of the process to obtain an SBA loan number for the Second Draw PPP Loan, if appropriate.

My lender said my second draw loan is being reviewed. What does that mean?

In some instances the Second Draw loan process may take longer for the SBA to review and approve applications. As a result, some lenders and businesses are getting the following automated message from the SBA:

 

“You have attempted to submit a PPP 2nd Draw request. Your original First Draw PPP Loan is still under review by the SBA and has associated holds that must be cleared before 2nd draw processing can proceed. We apologize for this inconvenience. To address your specific loan situation, please use the Forgiveness platform Inbox to request escalation of your loan review by the SBA. Error: E0117”

 

Don’t be alarmed if you get this message. It simply means that the processing and final approval of your loan may take a little longer.

What requirements apply to Second Draw PPP Loans?

Second Draw PPP Loans are subject to SBA’s and the Department of the Treasury’s (‘‘Treasury’s’’) consolidated interim final rule implementing the Paycheck Protection Program (‘‘Consolidated First Draw PPP IFR’’) and all PPP loan program requirements, except as otherwise provided in this section, including but not limited to the following terms:

  • The guarantee percentage is 100 percent.
  • No collateral will be required. 
  • No personal guarantees will be required.
  • The interest rate will be 100 basis points or one percent, calculated on a non-compounding, non-adjustable basis. 
  • The maturity is five years.
  • All loans will be processed by all lenders under delegated authority and lenders will be permitted to rely on certifications of the borrower in order to determine eligibility of the borrower and the use of loan proceeds.

Can I enter NAICS code 72 on my Second Draw PPP Loan application if the business activity code line was left blank on my business’s most recently filed income tax return?

If an entry for this line is missing from your tax return, you should report the industry code that is most applicable to your business’ primary business activity. If your business is in the Accommodation and Food Services sector (e.g., a hotel, restaurant, bar), you can only report a NAICS Code beginning with 72 if you can substantiate this with alternative documentation, such as permits or licenses issued by local governments that are unique to this sector.