PPP Loan Round 2: What You Need to Know Before You Apply


How to Apply


We are accepting applications now. Funding of the loans is anticipated to occur the week of January 18th, 2021.


First Round PPP Loans:

If you have not borrowed a PPP loan yet, you are eligible under the original CARES act rules and should apply with GCB.

Second Round PPP Loans:

If your business already borrowed a PPP loan, you are eligible to receive a 2nd PPP loan under the following criteria:

    1. You must have used or will use all funds from the first PPP loan prior to disbursement of the 2nd PPP loan
    2. You must have 300 employees or less
    3. You must have had a reduction of 25% or more in gross revenue in any quarter in 2020 compared to the same quarter in 2019. (Specific guidance provided for businesses which were only operating in certain quarters of 2019)

Your 2nd PPP loan must be under $2,000,000


Changes to the Loan


Accommodation & Food Service Businesses:

Bars and Restaurants are eligible to increase their 1st PPP loan using the new maximum loan amount calculation of 3.5 times average monthly payroll.  This is higher than the original calculation of 2.5 times average monthly payroll.  The second round PPP loan will be calculated at 3.5 times average monthly payroll for businesses in these industries.

Farmers and Ranchers – New Loan Calculation Formula

      1. Operate as a sole proprietorship, independent contractor or as an eligible self-employed Individual
      2. Report farm income or expenses on Schedule F (or any equivalent successor schedule); and 
      3. Were in business as of February 15, 2020 
      4. With NO EMPLOYEES
        1. The gross income in 2019 as reported on Schedule F (or any equivalent successor schedule) that is not more than $100,000 divided by 12 and multiplied by 2.5 (plus any EIDL advance made between January 31, 2020 and April 3, 2020 they want to refinance) up to a maximum of $2 million.
      5. With EMPLOYEES
        1. The sum calculated above would be added to the payroll calculation.  


The average total monthly payment for payroll costs incurred or paid during: 

      1. The 1-year period before the date on which the loan is made or
      2. Calendar year 2019 

Multiplied times 2.5 up to a maximum of $2MM

Seasonal Employers  

The average total monthly payments for payroll costs incurred or paid during:

      1. Any 12-week period between February 15, 2019 and February 15, 2020 

Multiplied times 2.5 up to a maximum of $2MM 

New Entities  

The quotient obtained by dividing:

      1. The sum of the total monthly payments for payroll costs incurred or paid as of the date on which the entity applies for the loans by the number of months in which those payroll costs were paid or incurred  

Multiplied times 2.5 up to a maximum of $2MM (These entities must have been in business before February 15th, 2020)

Accommodation and Food Services Businesses

The average total monthly payment for payroll costs incurred or paid during: 

      1. The 1-year period before the date on which the loan is made or 
      2. Calendar year 2019 

Multiplied times 3.5 up to a maximum of $2MM


Covered Operations Expenditure –defined as a payment for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records, and expenses.

Covered Property Damage Cost—defined as a cost related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation. 

Covered Supplier Cost—defined as an expenditure made by an entity to a supplier of goods for the supply of goods that are essential to the operations of the entity at the time at which the expenditure is made and is made pursuant to a contract, order or purchase order in effect at any time before the covered period with the respect to the applicable covered loan; or with respect to perishable goods, in effect before or at any time during the covered period with respect to the applicable covered loan. 

Covered Worker Protection Expenditure—defined as an operating or a capital expenditure to facilitate the adaptation of the business activities of an entity to comply with requirements established or guidance issued by the Department of Health and Human Services, the Centers for Disease Control, or the Occupational Safety and Health Administration, or any equivalent requirements established or guidance issued by a State or local government, during the period beginning on March 1, 2020 and ending on the date on which the national emergency declared by the President under the National Emergencies Act (50 U.S.C. 1601 et seq.) with respect to COVID-19 expires.

      • May include—the purchase, maintenance, or renovation of assets that create or expand a drive-through window facility; an indoor, outdoor, or combined air or air pressure ventilation or filtration system; a physical barrier such as a sneeze guard; an indoor, outdoor, or combined business space; an onsite or offsite health screening capability; or other assets relating to the compliance with the requirements or guidance described above. Other kinds of personal protective equipment, as determined by the Administrator in consultation with the Secretary of Health and Human Services.  Does not include residential real property or intangible property.

Covered Insurance Costs –this was amended to include group life, disability, vision, and dental insurance.


Loan Forgiveness


Simplified Revenue Test for Loans up to $150,000

For loans of $150,000 or less, the borrower may only submit a certification statement that it meets the revenue loss requirement at the time of loan application and provide proof of revenue loss at the time they submit a forgiveness application.  

For loans $150,000 or less made to an eligible recipient, forgiveness will be granted with the following information: 

A signed and submitted 1-page application (to be established by SBA within 24 days of the enactment of this Act) providing: 

        1. A description of the number of employees retained because of the PPP loan 
        2. Estimated amount of PPP loan spent on payroll costs 
        3. Total loan amount 
        4. Borrower attestations that: 
        5. The information is accurate 
        6. The borrower complied with the requirements of the statute 
        7. The borrower will retain records that prove compliance as follows: 
          1. Employment records- 4 years after application submission
          2. Other records-3 years after application submission 

Does not allow for additional information requests at the time of application for purposes of forgiveness but does allow requests to satisfy other statutory or regulatory requirements.  

The SBA will still have the right to audit and review these loans.


Scams and Fraud


According to the FTC, there are COVID-related scams making the rounds which target small businesses. Click here to read more: https://www.consumer.ftc.gov/blog/2021/01/target-new-covid-scam-small-business-owners