Second Paycheck Protection Program Loans ("Second Draw PPP")

The Paycheck Protection Program closed in May 2021. This information has been archived for reference only.

Many businesses have been negatively impacted by COVID-19. You needed additional money to keep things afloat and pay your employees, but you needed more funds. A second Paycheck Protection Program (PPP) loan could have helped.

At Pursuit, both existing PPP borrowers and new clients alike could have accessed a second PPP loan. You would’ve benefited from a lender that helped more than 7,000 businesses access the first round of PPP and supportive staff members that assisted you through your second application. You would’ve also continued to receive information that streamlined the loan forgiveness process.

The Second Draw Paycheck Protection Program was an SBA loan program launched to help small businesses stay afloat during COVID-19 related restrictions and closures. Like your first PPP loan, your second PPP loan could also be forgiven. Learn more about how a second PPP loan could have benefited your business.

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What is a Second PPP loan?

PPP was a program designed to provide small businesses struggling with the impact of COVID-19 with access to loans up to $2 million. PPP loans are forgivable, meaning if they were spent according to SBA PPP forgiveness guidelines, the loan converted into a grant. Second PPP loans were for businesses that obtained a first PPP loan in 2020.

Second PPP loan details

  • Loan amount: Up to 2.5x your business’s average monthly payroll costs up to $2 million. Accommodation and food services businesses (NAICS codes starting with 72) could’ve borrowed up to 3.5x.
  • Interest rate: 1%, fixed 
  • Term: 5-years; payments were not made until loan forgiveness
    was determined
  • Fees: No fees
  • Loan forgiveness: If you complied with forgiveness rules, all or some of your loan could of been forgiven
  • Collateral: Not required

Would I have qualified for a second PPP loan?

Second PPP loans were designed to help small businesses that continued to struggle with the impact of COVID-19. Here were the requirements for the second PPP loan:

  • You received a first PPP loan
  • You must have used the full amount of your first PPP loan for authorized uses by the expected date of disbursement of your second draw PPP loan. You did not need to have your first PPP loan forgiven to qualify.
  • You must of had 300 or fewer employees. If you were an employer in accommodation or food services (NAICS code starting with 72), you could’ve had 300 employees at each of your business’s physical locations.
  • Your business must of been able to demonstrate a revenue reduction of 25% or greater in 2020 relative to 2019. This is calculated by comparing your quarterly gross receipts for one quarter in 2020 with your gross receipts for the corresponding quarter of 2019. 
  • Your business could not of been permanently closed. If your business was temporarily closed or suspended, you were eligible.
  • Eligible business types included for-profit businesses, certain non-profits, independent contractors, sole proprietors, tribal businesses, and small agricultural coops. 

How could I have used my second PPP loan?

Your second PPP loan could’ve been used for the same expenses as your first PPP loan, with some additions. These expenses included:

  • Employee payroll, salary and wages
  • Utilities
  • Rent
  • Interest on loans and mortgages
  • Payment for any cloud computing, software and other accounting and HR needs.

  • Property damage costs that were not covered by insurance and that were due to public disturbances that occurred during 2020

  • Supplier payments pursuant to a purchase order, contract or order for goods that were in effect prior to receiving the PPP loan that were essential to your operations when the payments were made. Supplier costs for perishable goods could’ve been made before or during the life of the loan.

  • Any costs that you incurred to help your business comply with Federal, State, or local requirements beginning on March 1, 2020.

  • Personal Protective Equipment (PPE) purchases

You can also view frequently asked questions about second PPP loans.

The PPP loan was administered by Pursuit BDC

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