Paycheck Protection Program
Second Draw (PPP2)
The U.S. Small Business Administration (SBA) will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.
- All businesses applying for a PPP2 loan must show that their business revenue declined by at least 25% in any quarter in 2020 compared to the same quarter in 2019.
- Accommodations and Food Services companies with a NAICS code 72 can borrow up to 3.5 times the business’s average monthly payroll costs.
- Maximum loan amount of $2 million.
- PPP2 loans have an interest rate of 1%.
- Loans have a maturity of 5 years.
- Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower's loan forgiveness amount to the lender. If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (either 8 weeks or 24 weeks).
- No collateral or personal guarantees are required.
- Neither the government nor lenders will charge small businesses any fees.
A borrower is generally eligible for a Second Draw PPP2 Loan if the borrower:
• Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
• Has no more than 300 employees; and
• Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
Union State Bank suggests all eligible borrowers who apply for a PPP2 loan to have previously filed for loan forgiveness for their original PPP loan.
neighborhoods. Contact your Union State Bank lender for more information.
• 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.