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FAQs About Round 2 Of The Paycheck Protection Program (PPP)

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Erica Seppala

Erica Seppala

Erica is a writer based in Greenville, South Carolina. She is a graduate of Limestone College. Initially determined to be an accountant, she put away the calculator and picked up a laptop to pursue her dream of being a writer. Erica has spent the past 10 years writing blogs and articles for hundreds of private clients, and she loves sharing her love of research and the written word with everyone around her.

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Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    Jerrie Gall

    I’m in lending submitted status for the ppp 2nd draw. My question is this…
    I was asked this morning to submit my 2020 February bank statement to show a 25% reduction. My tax return was deposited during that time. Will that affect my approval?

      Erica Seppala

      Hi Jerrie!

      Provided that your calculations for the 25% reduction in income are correct and you meet all other requirements, receiving a tax refund should not have an impact on your approval. According to SCORE, “If it is not clear which deposits listed on the bank statement constitute gross receipts (e.g., payments for purchases of goods and services) and which do not (e.g., capital infusions), the business must annotate them.”

      You might want to reach out to your lender directly to make sure that it’s clear that the tax refund is not part of your gross receipts. If it’s not clear, you can find out from your lender how to resubmit documentation with the proper annotations.

      Good luck!

        kenneth

        if I have two businesses with two different EIN can I apply to both companies since both companies are suffering?

          Erica Seppala

          Hi Kenneth!

          If you have two businesses with two separate EINs, you may be eligible to receive a PPP loan for each provided that they each meet all other requirements. Good luck!

            Schelly G

            I applied for my first PPP Loan ever on March 31st. It was approved and the funding was deposited in the bank on April 5th. I am a self employed schedule C filer that had ONE employee. The loan amount was calculated using the GROSS Income from my 2019 tax year information. I had One Full-time “seasonal” employee in 2019 that finished the season for the year and was supposed to return in the beginning of the 2020 season. The pandemic lockdowns etc. kept that employee from returning in the 2020 season. I claimed that employee’s income on my first PPP Loan. All this information is based on previous years (2019 and 2020). For my covered period that I have to spend my PPP funds… (the covered period is in 2021 – the time starting from the date the loan funds were disbursed to me). I was given $26533 for my total loan amount = $20,833 for myself being self employed and $5,700 for the employee’s payroll. I have tried to get that employee to return during this 2021 covered period so that I could PROPERLY spend the portion of the loan that was given based on an employee’s income. (Either He is drawing unemployment and does not want to return or he is working somewhere else and doesn’t want to tell me.) I can’t find anyone else that wants to fill the position. (It’s a dirty job! We haul livestock)
            I want to make sure my loan(s) is/are FULLY FORGIVEN. So I have THREE QUESTIONS.
            1 – For the loan to be fully forgiven, is it proper and sufficient enough to pay myself $20,833 in Payroll costs and spend the rest on Protection equipment, and the other eligible categories? I have plenty of expense that will qualify for the other categories!
            2 – How long do I have to wait from the 1st draw PPP loan deposit date before I can apply for a second draw PPP Loan? All the language on every website I read is always talking about a WAITING PERIOD or the COVERAGE PERIOD.
            3 – What good is “the insistence of a specified LENGTH of a coverage period” when you have been suffering for over a year from government imposed lockdowns or restrictions that have drastically reduced the work available to you as an independent contractor… “AND you have a very short time left to apply for the 2nd draw before funds run out?”
            What I am trying to say here, is the emphasis on a coverage period being adhered to is preventing businesses from applying for a 2nd draw that they desperately need but they won’t have any time left if they wait 24, 11,10, or even 8 weeks! May 31st will be here before then. I have seen websites that state if you have an employee and are self employed… YOU MUST WAIT 11 weeks before you can apply for a 2nd draw! That pretty much tells you that you can’t apply for a 2nd draw because May 31st will be gone by then. Is the lender the problem? Are they the ones imposing a waiting period between each draw? Will Applying through a different lender solve this problem?

            If you have any clear help or explanations that will help with these questions… it will be greatly appreciated and I’M POSITIVE it will help many others. THANK YOU for your time! 🙂

              Erica Seppala

              Hi Schelly,

              Based on the rules of PPP loans, the $20,833 you’ve paid to yourself and other expenses in qualified categories can be forgiven.

              The waiting period between the First and Second Draw is not something we’ve seen directly in any of the SBA’s PPP documentation. However, many of our readers have reported that lenders seem to have a waiting policy in place. We continue to keep an eye on the latest updates from the SBA to find this specific rule in writing. My best advice is to consult with your lender regarding any waiting periods.

              As far as the problems regarding coverage periods, waiting periods, and other details, there is no clear-cut answer, unfortunately. The SBA has issued guidance for the PPP program, and it seems that lenders also have their own policies outside of this guidance. For any type of loan, whether it’s for COVID-relief or just your average small business loan, it’s always a good idea to shop around with lenders and understand their policies and borrowing criteria before applying.

              I wish I had more specific answers for you, but unfortunately, even with our extensive research, sometimes there’s just not a clear answer. We do hope that this and any future relief programs become less problematic for our readers who have already faced so much stress as a result of the pandemic.

                Meghan

                Question: I am an independent contractor who was funded for the first PPP six weeks ago. I just got approved for the second PPP, but when I went to sign I saw I had to have had the first for 8 weeks and have spent the money. I am on track to meet the payroll cost requirement at the end of this month, but not before the loan disbursement. Can I hold off on signing? Any advise would be greatly appreciated!

                  Jessica Dinsmore

                  Hi Meghan,

                  The 8-week rule is lender-specific as far as we can tell. To date, we have not been able to locate any language from the SBA specifying this waiting period. So if you haven’t already, you’ll want to check with your lender on their requirements (lenders can add requirements in addition to the SBA rules). As for meeting the PPP1 spending requirements–To qualify for a second draw, borrowers must have already used or plan to use all funds from their first draw. Based on the info you’ve provided, it sounds like you’ve got plans for all of your PPP1 funds, so you should be good!

                    Carson Holbrook

                    On my first PPP loan, due to circumstances I was unable to write a final payroll check for the eight weeks.
                    I was fogiven for the first seven weeks of payroll. As a result I am repaying the unused portion. My question is am I still qualified for round2? Thanks,

                      Jessica Dinsmore

                      Hi Carson,

                      PPP1 forgiveness doesn’t impact PPP2 eligibility–You can absolutely qualify for PPP2 as long as you still meet all eligibility requirements. Good luck!

                        jarman pandey

                        Change of ownership on dec 9, 2020. Can I apply for any ppp 1 or 2 ? Previous owner got ppp1. Is my business eligiable to ppp2 or 1 ?

                          Jessica Dinsmore

                          Hi Jarman,

                          That sounds a bit tricky! We found this source that relates to your question, and our interpretation of it is that you should be able to get a loan but you might want to reach out to the SBA and/or speak to a lender regarding your specific situation. I hope that helps!

                            Iris Enid Rodriguez Mangual

                            I applied for the PPP second round middle of January and then on 03/03 updated the application to a higher amount due to a wrong calculation (first was done 2.5 monthly payroll when was supposed to be 3.5 monthly payroll) then President Biden announced the updates mid of March… Still when i submitted the updated loan amount on 03/03 the loan was still under review and not approved. It was not until two weeks ago that was approved but came back with the incorrect amount approved based on the 2.5 calculation and not the 3.5 calculation (we are a full service family restaurant). Now they are asking me for the schedule c application, the full tax return and a bunch of stuff…. do I have the opportunity to get higher amount since when the guidance came was before my loan amount was approved and there were updates the lender did not made even it was showing in their portal the updated amount submitted 03/03? We are almost at the deadline of March 31st and need to understand since I am getting countless of different answers that do not make sense to me by the lender.

                              Jessica Dinsmore

                              Hi Iris,

                              Thankfully we have until May 31st now! However, your situation is a bit tricky. The loan is considered approved when it is assigned an SBA number. So, there’s a possibility that the loan was already approved before you were actually notified or received funds. In this case, unfortunately, the only thing that we would recommend is continuing to reach out to the lender and/or the SBA. We wish you the best of luck.

                                sam

                                I received a 2nd round ppp loan under old guidelines. Now that they are expanded to include up to 2.5 times payroll, can I reapply for this difference?

                                thank you.

                                  Jessica Dinsmore

                                  Hi Sam,

                                  This is what the SBA says:

                                  A borrower whose PPP loan has already been approved as of the effective date of this rule cannot increase its PPP loan amount based on the new calculation methodology.

                                  Previously approved loans can’t be increased. However, in seeking a second draw loan, you can use that methodology to get a higher amount — it just won’t have any effect on previous loans.

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