PPP Loan Round Two: What You Need to Know

By Owen Yin on June 22, 2020

Editor’s note: The PPP is currently closed. Both Democrats and Republicans are backing another round of PPP funding which makes a new round of funding promising. Read more in our breakdown of the two bills being debated.

The Paycheck Protection Programs depleted its initial $359 billion in funding, but has already been replenished with an additional $310 billion under the “Paycheck Protection Program and Health Care Enhancement Act.”

What does this mean for you? If you’re one of the millions of small business owners who wasn’t able to get funds during the first round, you have another chance. The SBA will resume accepting PPP loan applications on Monday, April 27 at 10:30AM EDT.

Here’s everything you need to know about the new bill.

Paycheck Protection Program

With renewed funding, the PPP program is staying essentially the same, with two exceptions.

  1. The bill makes additional guarantees that a portion of the funds must be granted by smaller lenders that cater to truly small, local businesses. At least $60 billion must be granted by small banks, community financial institutions, and credit unions.
  2. A new provision has made, where if you receive PPP funds that you realize you don’t need, you can return the funds within two weeks (with no penalty). Note, with PPP applications closed as of August 8, this no longer applies and you must wait until forgiveness applications open to pay back the loan.

Further reading: The Paycheck Protection Program (A Simple Guide)

How to apply

You can apply through your own financial institution or through an online lender such as BlueVine or Lendio.

The PPP application form can be found here.

Further reading: Documents Required for the PPP Application

Funding just for small businesses

Many of the small businesses who needed PPP funds the most in round one were passed over—while big businesses like Ruth’s Chris and Shake Shack were approved for $10 million loans.

The second round of the PPP provides a dedicated $60 billion just for the types of small businesses that were passed over in round one.

How does this work, exactly?

The ear-marked $60 billion goes directly to SBA-approved small banks, community financial institutions, and credit unions.

So if you’re a small business looking for a smaller loan, we recommend you find a small financial institution in your state that’s participating in the PPP.

You can find an official list here.

Start with the community banks and credit unions first, as they’re the most likely to be serving the smallest businesses with the provisioned $60 billion PPP fund.

EIDL Program

The new bill also provides an additional $60 billion for the EIDL program, which ran out of funding too. The funding includes $10 billion for the EIDL emergency grant, doubling the size of the original $10 billion fund. You can apply for the EIDL as soon as the SBA website is accepting applications again.

Further reading: How to Get an SBA Disaster Loan (EIDL)

Healthcare funding

While not related to small businesses, we thought it was important to note that the bill also provides emergency funding for hospitals ($75 billion) and COVID-19 testing ($25 billion).


Will the terms of the PPP change?

No, the bill did not include any changes, so the loan will have the same structure and requirements as before. We are still waiting for updated guidance from the government on forgiveness and eligibility. Learn more about PPP forgiveness.

If I already submitted an application before the funds ran out, do I need to submit again?

No, your lender will still have your application in their queue for processing.

If I haven’t heard back from my lender about my application, can I apply elsewhere? Am I allowed to have more than one PPP application?

If you have not heard from your lender at all, we recommend that you pursue another application, either from a community bank or with an online fintech lender such as BlueVine or Lendio. There is no penalty for applying more than once—whichever lender processes your application first will be the one who facilitates your loan.

Further reading: PPP Audits (What You Need to Know)

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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