Business owners who have received a loan under the Paycheck Protection Program may be eligible for the P3 Second Draw Loan.

At least $ 25 billion is set aside for eligible borrowers with a maximum of 10 employees, or for loans of $ 250,000 or less to eligible borrowers in low- and moderate-income neighborhoods.

The same general loan conditions apply as first-draw PPP loans with some modifications.

The Second Draw Paycheck Protection Program can be used to help fund salary costs, including benefits. The funds can also be used to pay mortgage interest, rent, utilities, worker protection costs related to COVID-19, costs of uninsured property damage caused by looting or vandalism in 2020, and some supplier costs and expenses for operations.

Here’s what small business owners need to know about this loan.

A borrower is generally eligible for a second-draw PPP loan if they:

You have already received a first draw PPP loan and will use, or have used, the full amount only for authorized uses;

Has no more than 300 employees; and

Can demonstrate a reduction of at least 25% in gross revenue between comparable quarters in 2019 and 2020.

Prepare your PPP loan forgiveness request

The SBA accepts applications from January 13 to March 31, 2021 from participating lenders.

They encourage applicants to use the Lender Match tool for this process or to locate a lender near you.

All second-draw PPP loans will have the same terms regardless of lender or borrower.

The Paycheck Protection Program (PPP) now allows certain eligible borrowers who have already received a PPP loan to apply for a second PPP loan with the same loan terms and conditions as their first PPP loan. Second-draw PPP loans can be used to help finance salary costs, including employee benefits.

The funds can also be used to pay mortgage interest, rent, utilities, worker protection costs related to COVID-19, costs of uninsured property damage caused by looting or vandalism in 2020, and some supplier costs and expenses for operations.

Conditions for full exemption Second-draw PPP loans granted to eligible borrowers are eligible for full loan exemption if during the period covered of 8 to 24 weeks following the disbursement of the loan:

• Employee and compensation levels are maintained in the same manner as those required for the PPP First Draw loan; • The loan proceeds are spent on staff costs and other eligible expenses; and • At least 60 percent of revenues are spent on salary costs. Targeted Eligibility A borrower is generally eligible for a second-draw PPP loan if the borrower: • has already received a first-draw PPP loan and will use or have used the full amount only for authorized uses; • Has no more than 300 employees; and • Can demonstrate a reduction of at least 25% in gross revenue between comparable quarters in 2019 and 2020.

For most borrowers, the maximum amount for a second-draw PPP loan is 2.5 times the 2019 or 2020 average monthly salary costs up to $ 2 million.

For borrowers in the accommodation and food services industry, the maximum loan amount for a second-draw PPP loan is 3.5 times the 2019 or 2020 average monthly salary costs up to $ 2 million.

Borrowers can apply for a second PPP loan until March 31, 2021, through any existing SBA 7 (a) lender or any federally insured depository institution, federally insured credit union, lender eligible non-bank or agricultural credit system institution that is participating in the PPP.

All second-draw PPP loans will have the same terms regardless of lender or borrower. A list of participating lenders as well as additional information and full terms are available online.

At least $ 25 billion is set aside for second-draw PPP loans to eligible borrowers with up to 10 employees or for loans of $ 250,000 or less to eligible borrowers in low- and moderate-income neighborhoods.

To promote access for small lenders and their clients, the SBA will initially only accept second-draw PPP loan applications from community financial institutions from January 13, 2021.

The PPP will open to all participating lenders for second-draw PPP loans shortly thereafter. Visit www.sba.gov or www.treasury.gov for more information and details.