PPP LOANS – Eligibility Checklist for the Second Draw Opportunity

December 2020 — By Michelle McCullough


NAVIGATE is continuing to work hard in helping our clients acquire their forgiveness for the initial PPP loans, but also to be well aware of any additional assistance available for their businesses. This second draw application has recently been made available, and below are the big five qualifiers.

Eligibility Checklist for PPP Second Draw Loan Qualification:

  • Must demonstrate that your gross receipts in any quarter of 2020 are down at least 25% compared to the same quarter in 2019.
  • Generally, borrowers may receive a loan amount of up to 2.5X the average monthly payroll costs during the year before the loan or the previous calendar up to a maximum of 2M.  Hard hit industries in the food and hospitality industries can receive 3.5X their payroll.
  • Must not employ more than 300 people and have used the full amount of your first PPP loan.
  • Entities that qualify are businesses, specific non-profit organizations, housing co-operatives, veterans' organizations, tribal enterprises, self-employed individuals, sole proprietors, independent contractors, and small agricultural co-operatives.
  • The forgivable expenses will equal the sum of your payroll costs, as well as covered mortgage, rent, and utility payments, covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures incurred during the covered period.  The same 60/40 allocation between payroll and non-payroll costs that applied to initial PPP loans will apply to this opportunity.

The timing of the availability of the funds is still TBD, but NOW is the time to get your books in order. You also might need bank statements as a back-up to your internally prepared reports, so get those ready and make sure you have reconciled your bank statements with your reports. Doing this work now will help you get to the front of the line when the next round of PPP finally becomes available. 

If we can assist at all with getting your books and reporting in good order, explore the opportunity for a second draw, or help you apply for the PPP Loan Forgiveness - please contact us