PPP Second Draw Information

Important Information to Simplify Your Application Process

Does your business qualify for PPP Second Draw loan?

A borrower is generally eligible for a Second Draw PPP Loan if the borrower meets the following conditions:
1) Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
2) Has no more than 300 employees; and
3) Can demonstrate at least a 25% reduction in gross receipts (*) between comparable quarters in 2019 and 2020

How are Gross Receipts defined?

Gross Receipts is defined to generally include “total income” plus cost of goods sold and excludes capital gains. Refer to the Small Business Act for clarification.

What is different on this PPP loan application compared to Round 1 and 2?

To complete your application, you will need:
1) PPP Round 1 or 2 loan number
2) PPP loan amount
3) Date your company was formed, per the Secretary of State or original corporate documents

Once your PPP loan is approved we will fund the loan proceeds directly into your Quantum deposit account. We will provide you a deposit account application during the PPP process if you do not have a deposit account for the entity for which you are applying.

What documents do I need to provide?

For ALL APPLICANTS 

1) 2483 SD, Borrower Application Form
2) Business license
3) Articles of incorporation or Articles of organization
4) Driver’s license for owner(s)
5) 2019 or 2020 payroll processor records (depending upon which year you select)
6) 2019 Federal Income Tax Return (For loans greater than $150,000)

For most entities supporting documents will include:

1) 2019 or 2020, 941 Form(s) for all 4 quarters or equivalent payroll records and reports
2) If applicable, retirement and employee group health care records, life disability, vision and dental
3) 2019 (selected quarter) compared to same quarter in 2020 to document the 25% decrease in gross receipts

For borrowers who are self-employed and have employees:

1) 2019 or 2020 (whichever is being used to calculate loan amount) IRS Form 1040 Schedule C
2) Form 941 (or other tax forms or equivalent payroll processor records containing similar information)
3) State quarterly wage unemployment insurance quarterly tax reporting forms from each quarter in 2019 or 2020 (whichever is being used to calculate loan amount) or equivalent payroll processor records
4) If applicable, borrower must supply evidence of any retirement and employee group health, life, disability, vision and dental insurance contributions by company
5) 2020 invoice, bank statement, or book of record to establish that the applicant was in operation on or around February 15, 2020

If the applicant is self-employed and does not have employees: 

1) 2019 or 2020 (whichever is being used to calculate loan amount) Form 1040 Schedule C
2) 2019 or 2020 (whichever is being used to calculate loan amount) IRS Form 1099-MISC detailing nonemployee compensation received (box 7)
3) Invoice, bank statement, or book of record that establishes that the applicant is self-employed
4) 2020 invoice, bank statement, or book of record to establish that the applicant was in operation on or around February 15, 2020

Full Forgiveness Terms Second Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:

• Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan;
• The loan proceeds are spent on payroll costs and other eligible expenses; and
• At least 60 percent of the proceeds are spent on payroll costs.

For specific questions related to the Lenders Cooperative Loan Portal:

Affiliate Question:

One of the first questions on the application is about affiliated entities. If you answer “yes” to this question, then you must enter those company names at the bottom of the first page. If you do not enter the affiliated company name/names you will get an error message that reads “has other businesses.”

NAICS Question:

NAICS box is for letters, not numbers. Please type the name of your industry and then the dropdown box will activate with specific NAICS categories.

Revenue “Receipt” Calculation:

Please provide documentation for the selected quarters that you are comparing. This documentation could be based on an internally prepared statement. When providing quarterly documentation, you must upload the actual three months of quarterly information for both quarters that you selected.

Please do not upload any password protected files as we will not be able to review the document.

Salary Calculation:

As in the first two rounds of PPP, salaries are capped at $100,000 per employee. We are attaching an Excel spreadsheet to help calculate the average monthly salary. This will assist you when completing this part of the application.

• Just as a reminder, if you will be using the 24 week covered period, the maximum amount of compensation eligible for forgiveness for a non-owner employee is $46,154 ($100,000/52 weeks x 24 weeks).
• If a shorter period is used, for example, 14 weeks, then the maximum amount of compensation eligible for forgiveness is $26,923 ($100,000/52 weeks x 14 weeks).

For an owner-employee, if using 24 weeks, the maximum amount of compensation eligible for forgiveness is $20,833. This amount would need to be pro-rated as well, as follows.

• If applying after 14 weeks, the maximum amount of compensation eligible for an owner-employee is $12,152 ($20,833/24 weeks x 14 weeks).

Interim Final Rule

Payroll Calculator