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Second Round of PPP Loans

14 Jan 2021 10:38 AM | Anonymous

The Consolidated Appropriations Act of 2021 was signed into law on December 27, 2020. 

One of the main components of the Act was the introduction of a second round of Payroll Protection Program (PPP) loans capped at US$2M. This second round of loans is commonly known as "Second Draw".

Nonprofits are eligible for a Second Draw if they meet the following criteria:

  • Employ no more than 300 employees in any single location.
  • Experienced at least a 25% reduction in gross receipts in any quarter of 2020 compared to the same quarter in 2019.
  • Received a First Draw PPP Loan and have used, or will use, the full amount before receiving the Second Draw PPP Loan disbursement.
  • Was in operation on February 15, 2020, and has not permanently closed.
  • 501(c)6 organizations who meet the criteria above are eligible for PPP2 funding if they have:
    • Fewer than 300 employees.
    • Less than 15% of gross receipts from lobbying.
    • Lobbying that is less than 15% of total activities and less than US$1M during the most recent tax year ended prior to February 15, 2020.

The Second Draw loan is calculated at the lesser of 2.5 times the average total monthly payroll costs incurred or paid by the nonprofit during either calendar year 2019, calendar year 2020, or the one year period before the date of the loan, or the US$2M limit.

Eligible recipients will be able to apply for the Second Draw through March 31, 2021.

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