PPP Loan: Navigating the 2nd Draw

The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms.


The last day to apply for and receive a Second Draw PPP Loan is March 31, 2021.


2nd Draw Loan Eligibility


To be eligible, one must have:

  1. Previously received a First Draw PPP Loan and will or has used the full amount ONLY for authorized uses: mortgage costs, property damage, and other operational costs

  2. 300 employees or less; and

  3. At least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.


Revenue Reduction Requirement

A second draw borrower must have experienced a revenue reduction of 25% or greater in 2020 relative to 2019. To calculate the reduction, compare your quarterly gross receipts from any quarter in 2020 with your gross receipts for the corresponding quarter in 2019. If you were not in business at all during 2019, but was in operation on February 15, 2020, then you can compare the second, third, or fourth quarter for 2020 to the first quarter of 2020.


Documentation for Application


An applicant for a second draw loan must submit supporting documentation, which may include annual or other relevant tax forms. If those are not available, quarterly financial statements or bank statements will do.


DO NOTE: if the principal amount of the second draw loan does not exceed $150,000, such documentation will not be required for the loan application but must be submitted on or before an application for loan forgiveness.


Visit sba.gov to download your official application and get started today! Remember, your VAAS Pro consultants would love to assist you. Connect with us and we be glad to point you in the right direction!


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