Can I Apply for the PPP Twice?

Editor’s note: On Tuesday, May 4th the PPP ran out of general funds and the SBA stopped accepting new PPP loan applications. A reserve of funds is still available for community financial institutions that lend to businesses run by women, minorities, and underserved communities. Additionally, a reserve of funds remains for applications previously submitted but not yet reviewed by the SBA. If you have already submitted your loan application, however, this does not guarantee you funding.

The initial Paycheck Protection Program (PPP) was open until August 8, 2020. It offered fully forgivable loans to help businesses weather the pandemic. But as businesses used up all of their PPP funds, it became clear a new PPP loan was needed.

On December 27, a new bill was signed into law with a second stimulus package. This included opening up a second PPP loan for businesses that have already used up their first PPP loan—if they meet certain criteria.

Can I get a second PPP loan?

A second PPP loan is only available to businesses that were in operation before February 15, 2020. They must have used up their initial PPP loan and have incurred a 25% or more reduction in revenue in 2020.

A 25% or greater reduction in revenue must be shown by comparing the gross sales revenue in any quarter in 2020 with the same quarter in 2019.

For example, if a business made $20,000 in the second quarter (Q2) of 2019, they must show a 25% reduction in Q2 2020. If the businesses recorded $15,000 or less in Q2 sales in 2020, they are eligible to apply for a second PPP loan.

When can I apply for a second PPP loan?

Applications are open now! You can only apply if you will have used up your first PPP loan by the time your second PPP loan funds are disbursed.

I’m applying for my second PPP loan. Can I apply through more than one lender?

Yes! However, since your initial lender already has your information on file, applying through the same lender is your best bet.

At Bench, we’re helping businesses by connecting them to lenders and assisting with PPP forgiveness applications.

According to our lending partners, the SBA’s system will accept the first valid application that arrives from a lender, and automatically reject subsequent ones. The catch is that if you get approved by one lender, you must notify any other lenders you have applied with. For example, if you applied to BlueVine and Chase and get approved from BlueVine, you must notify Chase.

Here’s an overview of how your lender sends your application to the SBA:

  1. The lender processes your completed application, which contains your tax ID (EIN or SSN).
  2. The lender submits your application to the SBA through a system called E-Tran.
  3. If everything is in order, the SBA reserves your funds and assigns an approval number called a PLP (preferred lending partner) number.
  4. The PLP is associated with your Tax ID and no further PLPs can be issued.
  5. The lender is able to send you closing documents and use the PLP to complete the loan process.

Any lender that attempts to submit a new application for a tax ID that already has a PLP assigned to it will receive an automatic rejection from the E-Tran system. There is no risk of being flagged for fraud for applying more than once.

In fact, it’s a good idea to apply for your second PPP loan with multiple lenders to maximize your chance of obtaining funding.

When applications open for PPP round two, here’s what action you should take, depending on where you are in the process.

I applied to my bank and haven’t heard back.

We recommend you begin an application with a second lender in order to increase your chance of receiving PPP funding. Consider a community bank or credit union in your city, as a portion of the new funding is reserved for those smaller lenders only. Online lenders such as Fundera, Kabbage, BlueVine, and Lendio are also options.

I applied to my bank and heard back.

Great—it sounds like your application is ready to go. Your processed application is now in your bank’s queue. Be sure to respond to any follow-up requests they may have. Missing documents or incomplete financials can greatly hold up an application.

I haven’t applied yet.

With limited funding available, it’s best to apply as soon as the PPP applications go live. We recommend going with an online fintech lender such as Bluevine or Lendio due to their efficient processes.

Further reading: PPP Lenders Accepting Applications in January 2021

I applied and got approved.

Congratulations! Check out our guide for what to do once your PPP loan has been approved.

I applied and got rejected.

You can choose to continue working with your lender to provide missing documentation (if that was the reason for the rejection). You can also begin a second application with another lender.

I applied, but I have a second business.

There is a limit of one PPP loan per tax ID. If your second business has a separate unique EIN, it’s eligible to apply for the PPP as well.

More COVID-19 Resources

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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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