The Paycheck Protection Program Second Round: How to Apply
A Quick Recap of the First Draw of PPP Loan
The unwelcomed outbreak of covid-19 has painfully hit the small businesses, dragging them on the page of financial fragility, layoffs, and complete closure of the business. In response to the myriad miseries caused by Covid-19, the U.S government presented the Coronavirus Aid, Relief, and Economic Security Act to help small businesses, aligned with their business projections. CARES Act uncovered the Paycheck Protection loan program on 03-April-2020, held under the supervision of the Small Business Administration (SBA). The loan applications were accepted till August 2020.
What is the Second Draw of PPP Loans?
After the success of the first Draw of the PPP loan, the U.S. Treasury Department has decided to get on with the Second Draw of PPP loans. Like First Draw, the Second Draw of the PPP loan is 100% backed up by the government authorities. An amount of $25 Billion has been set aside for the Second Stimulus Package, following the same First Draw rules to ensure disbursement of the loan.
How much amount can I get in the Second Draw of PPP loans?
Eligible borrowers will follow the First Draw loan calculation method which is 2.5x of 2019 or 2020 average monthly payroll costs, max up to $2 million. Eligible borrowers, involved in accommodations and food services sectors can get a maximum loan of 3.5x of their 2019 or 2020 average monthly payroll costs, up to $2 million. But NAICS 72 will confirm you as a part of the accommodation or food sectors with respect to their constraints. Further, you can calculate the average of your monthly payroll cost using SBA’s loan calculation guidelines.
The Second Draw of the PPP loan will be forgiven if?
Borrowers after winning a slot in the Second Draw of PPP Loan are eligible for full loan forgiveness if the following requirements are met within 8-24 weeks from the date of loan amount disbursement.
- The number of employees and compensation level (Salary or wages you pay to your employees) should be maintained likewise the First Draw of the PPP loan.
- The entire amount should be spent on payroll and other valid uses, prescribed by the authorities.
- At least 60 percent of the loan amount should be spared for payroll costs (that follows SBA’s PPP forgiveness instructions).
The Second Draw of the PPP loan will not be forgiven if?
- The borrower does not apply for forgiveness within 10 months from the date the loan amount was disbursed to his account.
- Borrower requests for a further loan.
How to apply for the Second Draw of the PPP loan program?
SBA has started the application process from the 13th of January 2021, until the 31st of March. After meeting the above eligibility criteria, you can apply for the Second Draw of the PPP loan Program via loan application.
The recommended way is to select the same lender, you selected in the First Draw of the PPP loan program. All the necessary information is already there with your previous lender, so you don’t have to resubmit the required documents. With Bitx Funding, every borrower is highly satisfied with our kind assistance in the disastrous situation of COVID-19. Bitx funding is authorized for the Second Draw of the PPP loan program and will offer the loan without any hassle.
A borrower is eligible for the Second Draw of the PPP loan program if:
- Received PPP loan in the First Draw of PPP loan program
- The entire amount of the loan was used for authorized purposes
- The entire amount of the First Draw of the PPP loan has been used or will be used before the disbursement of the Second Draw amount.
- Has 300 employees or less
- Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses
- Has no more than 300 employees
- Has no crime history
- Belongs to the U.S.
- Should be able to demonstrate 25% of the amount was spent in gross receipt( Not required if requesting below $150,000; required if applying for forgiveness).
Second Draw of PPP loan with Bitx Funding
You can reach a loan specialist toll-free at 1-800-824-2407, or email at firstname.lastname@example.org, or apply online here and we can guide you on which loans are the best fit for your business.