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PPP Loans: Second time and new borrowers
Posted on Tuesday, January 12, 2021
U.S. capitol building with the words Applications Available

Jan. 12, 2021

We’re excited to announce that the application is now available for the SBA’s second round of Paycheck Protection Program (PPP) loans through the recently signed Relief Act.

The Relief Act will provide billions of dollars in aid to small businesses and individuals impacted by COVID-19. It contains a new round of PPP loans with provisions intended to help smaller businesses, and offers additional funding to borrowers of the original PPP loans. It also contains guidance and changes that affects past borrowers of PPP loans.

The following contains key guidance and issues contained in the Act that focus on second time and new borrowers of both PPP Loans and Economic Injury Disaster Loan (EIDL) grants.

PPP eligibility requirements for borrowers to receive a 2nd PPP Loan:

PPP loan borrowers may apply for an additional loan of up to $2 million, if they meet the following requirements:

  • 25% reduction in revenue Quarter over Quarter (2019 vs. 2020)
  • Or 25% reduction in annual gross revenue
  • 300 or fewer employees
  • Must have spent all money received in first round PPP loans

Documentation Required:

  • Quarter over Quarter – Copy of quarterly income statements or bank statements
  • Annual Reduction – Must submit tax forms from 2019 & 2020
  • If you use 2019 payroll costs to determine Second Draw PPP and Lender is the same as the first PPP Lender, no additional documentation is needed to substantiate payroll costs.

Additional documentation and eligibility requirements may apply please discuss with your lender.

Additional funding may be available for borrowers of original PPP loans:

  • Eligible borrowers who returned all or part of their original PPP loans may reapply for an amount equal to the difference between the amount retained and the maximum allowable amount
  • Eligible borrowers who did not accept the full amount of the PPP loan for which they were eligible, may request to increase the PPP loan to the maximum amount permitted
  • A borrower of a PPP loan in 2020 that is eligible for an increased loan amount may request to increase the loan amount even if the initial PPP loan has been fully disbursed to them

501(c)(6) Organizations are now eligible for PPP Loans. The following eligibility rules may apply:

  • Have 300 or fewer employees
  • Do not receive more than 15% of receipts from lobbying
  • Lobbying activities do not comprise more than 15% of total activities and cost of lobbying activities does not exceed $1,000,000

Eligible costs will be expanded

In addition to the original PPP eligible costs (e.g. health insurance, payroll, retirement contributions, etc.) the Relief Act added several additional costs as eligible for forgiveness.  The costs include but are not limited to expenditures to adapt business activities to comply with COVID-19 health and safety guidelines, payroll costs that include insurance payments for group life and disability, operations expenditures such as business software that allow businesses to facilitate operations, or product or service delivery.  Please reach out to your Western State Bank loan officer for additional information on eligible costs.

See how the Relief Act will affect past borrowers of PPP loans and EIDL grants.


Please note this is based on information that is currently available and is subject to change.

Western State Bank will continue to monitor ongoing updates. Please reach out to your Western State Bank loan officer with questions or further guidance unique to your situation.

To get started, download and application and submit it to a Western State Bank loan officer.