2021 Round of PPP Funding: A New Lifeline for Small Businesses is Available Now!

On January 7th, the Treasury Department announced that the Paycheck Protection Program, a unique program that kept many businesses afloat during the initial months of the pandemic, will re-open the week of January 11 for a second round of loans for new borrowers and certain existing PPP borrowers. To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans beginning on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13. The PPP will open to all participating lenders shortly thereafter.The PPP fund provides forgivable loans to businesses, providing they maintain their payroll.


In addition, at least $40 billion has been set aside for businesses with ten or fewer employees and for loans under $250,000 in low-income areas.

The basic criteria to apply are as follows: (i) have used or will use the full amount of your first PPP loan, (ii) only businesses with 300 employees or fewer (loans are capped at $2 million whereas during the first round, businesses with fewer than 500 employees could receive as much as $10 million), (iii) borrowers need to prove that they saw a 25% reduction in gross receipts during a quarter in 2020 compared with the same quarter in 2019, and (iv) the business has not permanently closed. Businesses that have temporarily closed or suspended operations can receive a second-draw loan.

In addition, restaurants, hotels, and other accommodation and food service industry businesses can borrow up to 3.5 times their average monthly payroll costs up to the capped amount of two million.

As was the case with the First PPP, the Second PPP funds are also forgivable so long as the funds are on used to cover the following costs:

• Payroll (At least 60% of the total loan amount must be used on payroll expenses to qualify for full loan forgiveness.), paid sick leave, group insurance benefits paid by employer.
• Operating costs.
• Property damage sustained during protests and disturbances in 2020 if not covered under insurance.
• Payments to a supplier covering contracts and purchase orders in effect before taking out the second-draw loan.
• PPE expense and changes made to the business to meet new health and safety requirements.


If you have any questions or would like to discuss the 2nd Paycheck Protection Program further and discuss whether your business should take advantage of this vital resource, please reach out to one of our corporate lawyers at Antheil Maslow & MacMinn, LLP.