The Consolidated Appropriations Act (CAA), 2021 includes a
provision that modified and extended the Small Business
Administration's (SBA)
Paycheck Protection Program (PPP). Specifically, Section
311 of the Additional Coronavirus Response and Relief provisions of
the CAA provides for PPP second draw loans for eligible businesses.
Employers seeking a PPP loan may apply through March 31, 2021.
Below are answers to some key questions regarding second draw PPP
loans.
Question 1. What are some key distinctions between first and
second draw PPP loans?
Answer 1. Second draw PPP loans are intentionally narrower and
smaller in terms of eligibility and amount. In order to be
eligible, businesses must be able to demonstrate that they
experienced a 25 percent reduction in gross receipts in a 2020
calendar quarter compared to the same quarter in 2019. While
first draw PPP loans were capped at $10 million per borrower based
on payroll costs in 2019, second draw PPP loans have a
