How to Apply for Your Second PPP Loan

With the second stimulus package came the introduction of second draw PPP loans for certain eligible businesses. With our guide, you can take out the guesswork to ensure you’re getting access to the funding your business needs to thrive in 2021.

Eligibility criteria

If the following statements apply to your business, you are eligible to apply for your second PPP loan in 2021.

  • You have used up your first PPP loan
  • Your business was operational before February 15, 2020
  • Your business is still open and operational
  • You have no more than 300 employees
  • If your business has multiple locations, you have no more than 300 employees per location
  • You can show a 25% or greater reduction in gross revenue

Where should I apply for a PPP 2 loan?

While you can apply for your second PPP loan through any lenders, it’s recommended you apply through your first ppp loan lender.

Your information will already be on file and verified making the process faster. At Bench, we’re assisting businesses by connecting them with lenders like BlueVine. We’ve heard from our lending partners that they will be prioritizing borrowers they’ve worked with before when it comes to approving second draw PPP loans.

However, you’re still free to explore other lenders. BlueVine is accepting second draw PPP loan applications even if you don’t have a borrowing history with them.

The PPP 2 application form 2483-SD explained

We’ll go through the application box by box. We recommend you follow along by downloading a PPP loan application here. Check in with your lender before filling in the application. Some lenders will require you to submit your information through their online portal as opposed to submitting a paper application.

Part 1: Your business information

PPP1 App Business Info

Business structure

Start by selecting the business structure that best represents your business. Try to be as specific as possible. For example, choosing “Sole Proprietor” is going to be better than “Self-Employed Individual”—as even though both could be correct, one conveys more information.

Business name and address

You are required to provide both your Business Legal Name and your DBA or Tradename if applicable. Your Business Legal Name is found on any government forms. A DBA or Tradename is what appears on bank statements or invoices if it’s different than your Business Legal Name. Your Business Address is also found in these documents.

NAICS code

You can find your NAICS code on a website like NAICS codes are self-assigned meaning you pick the code that best suits your business rather than having one assigned to you. Start by searching keywords of what you do or look up a similar business’s NAICS code.

Business EIN/TIN/SSN

Your EIN (Employer Identification Number), TIN (Taxpayer Identification Number), or Social Security Number (SSN) is found on previous tax returns. If you’re having trouble finding this info, follow the IRS’s steps to finding your EIN here. Note that an SSN should only be provided if you do not have a business EIN or TIN.

Contact information

Finally, provide the name, business phone, and email address of the primary contact for the application. This will be who all future communications are directed to.

Part 2: Loan amount calculation

PPP App Loan Amount

Average monthly payroll costs

Your loan amount calculation starts with finding your average monthly payroll costs. Your average monthly payroll costs can be calculated using one of the following:

  • the one year period before the loan application

  • the calendar year of 2020

  • the calendar year of 2019

Once you’ve chosen the time period you want to use, follow these steps:

Step 1: Add up the payroll costs for all employees whose principal place of residence is in the United States. Payroll costs include:

  • Salaries, wages, commissions or tips

  • Employee benefits including paid leave, allowance for separation or dismissal, and healthcare benefits including insurance premiums and retirement benefits

  • State and local taxes

  • For the self-employed only: net earnings from self-employment

Step 2: Subtract any compensation paid to an employee or earned as self-employment income in excess of $100,000. For example, if you have two employees earning $120,000 over the year, subtract $40,000 from your payroll total.

Step 3: Divide the total amount from Step 2 by 12 and put it in the Average Monthly Payroll box.

Loan request amount

Once you have your average monthly payroll costs, finding your loan amount is as easy as multiplying it by 2.5 or 3.5.

Most businesses will use 2.5, the same calculation used in 2020.

But for businesses in the food and accommodation industry, you are eligible for 3.5 times your average monthly payroll costs. You are in the food and accommodation industry if your NAICS code (which you’ve provided already on this application) starts with 72.

Loan amounts are capped at $2 million. Put the lesser of your calculated loan amount and $2 million dollars in your loan request amount box.

Number of employees

Add up all employees across all locations and affiliates. There are three main cases where your business and another business would be considered affiliates:

  • If your business controls or has the power to control another business

  • If another business controls or has the power to control your business

  • If a third party controls your business and another business

You can review the full affiliation rules the SBA provided here.

The purpose of the loan

Check all boxes that apply. Businesses that do not run payroll but are still eligible for a PPP loan should check “Payroll Costs.” Self-employed individuals are eligible to take the PPP to cover your self-employment income. This is called owner compensation replacement or OCR and is still considered a payroll cost.

The purpose of PPP loans is to protect paychecks. If you do not select “Payroll Costs” in this section, your application may be denied.

PPP First Draw SBA Loan Number

The PPP loan you received in 2020 is considered your first draw PPP loan. You can find this number on the loan offer you received.

If you cannot find your loan offer, reach out to your previous lender. Most lenders will have this information available in an online portal you can access.

Part 3: Reduction in gross receipts

PPP App Revenue Reduction

A new eligibility requirement for second draw PPP loans is showing you experienced a 25% reduction in gross receipts.

For loan amounts of $150,000 or less, this section can be left blank. However, you will be asked to provide this information either when you apply for forgiveness, or beforehand.

To calculate the reduction in gross receipts,you can use:

  • Any quarter in 2020 and compare it with the same quarter in 2019

  • Compare your annual 2020 and 2019 gross receipts

If you choose to use annual numbers, put “Annual” in the 2020 quarter and reference quarter boxes.

If your business opened in 2020 but was operational on February 15, 2020, you must use Q1 2020 as the reference quarter. The 25% reduction in revenue must be shown by comparing either Q2, Q3, or Q4 2020 with Q1 2020.

Further reading: How to Calculate a 25% Reduction in Revenue for PPP 2

Part 4: Applicant Ownership

PPP App Ownership

List all members of the ownership that hold 20% or more of the business. If you have more owners than spaces on the application, attach them as a separate sheet.

Part 5: Questionnaire

PPP App Questionnaire

Answer each question and initial where indicated. Answering yes to questions 1, 2, 4, or 5 will mean you are ineligible for a PPP loan.

Part 6: Certifying you applied in good faith

On page two of the application form, there are 16 statements. Each must be signed to certify that you are applying in good faith that these statements apply to your business. Be sure to read through each. Signing on any of these statements later found untrue can result in penalties through imprisonment or fines.

More COVID relief resources

What’s Bench?

We’re an online bookkeeping service powered by real humans. With Bench, you get a dedicated bookkeeper and powerful reporting software for a crystal clear view of your financial health. All of our services are eligible expenses for PPP forgiveness, and we’ll even provide support in applying for the PPP (or getting that loan forgiven). Whatever happens next, we’re right there with you. Get started on a free trial today.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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