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A Guide To The Second Round Of Paycheck Protection Program

Updated : December 30th, 2020

Recently, Congress has announced a second stimulus package under which the unemployed Americans will get $600 stimulus payments. In addition to offering financial assistance to the unemployed citizens, the package also provides aid to the small businesses through the Paycheck Protection Program (PPP). 

In this article, we will tell you who qualifies for the second round of the Paycheck Protection Program and lots more about it. 

What Is A Paycheck Protection Program?

The Paycheck Protection Program is a loan program that provides cash-flow assistance to small businesses. The program is backed by the Small Business Administration (SBA) and originated from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. 

More About The Second Round Of Paycheck Protection Program

The new stimulus package provides $300 billion for financial support of small businesses, including extra PPP. In addition, the package includes provisions for simplified forgiveness for PPP loans of $150,000 or less. 

The second round of the Paycheck Protection Program will have a framework similar to the first-round funding. The loan amounts will be based on the payroll costs (2.5 times for most businesses and 3.5 times for restaurants and food businesses), and the maximum loan will be $2 million, which is lesser than that given by the first program. 

However, allowable expenses will be similar to that of the initial program but with the addition of safety expenditure. Note that you will need 60% to 40% allocation between payroll and non-payroll costs for full forgiveness under the second program.

Who Qualifies For The Second Round Of Paycheck Protection Program?

The following businesses are eligible for the second round of the Paycheck Protection Program. 

  1. Self-employed individuals, independent contractors, and sole proprietors,
  2.  Nonprofit organizations, tribal business concerns, small businesses, veterans organizations, and small agricultural cooperatives that adhere to the SBA size standards. 
  3. Certain small news organizations, housing cooperatives, destination marketing organizations, and 501(c)(6) nonprofits. 

To qualify for the PPP loan, businesses must meet the below-listed requirements. 

  • Businesses must have 300 employees or less, which is down from the 500 employees in the first round
  • Small businesses must have already used or plan to utilize their PPP funding received from the first round
  • The business must have a reductive in its revenue by at least 25% in at least one quarter in 2020 when compared to previous quarters
  • Business must have been in operation by February 15, 2020

Note – Certain types of businesses, including businesses where the primary activity is lobbying and those with at least 20% of China ownership, are not eligible for PPP.

How Can Businesses Use Funds From PPP?

The businesses can choose any period between 8 and 24 weeks to be their “covered period.” During the period, they can use the PPP funds for payroll, rent, and mortgage expenses. The second stimulus bill also adds some new expenses to the list of “qualifying expenses,” including operating expenses and costs to protect employees from COVID-19 and covered property damage.

What Counts As Payroll?

Payroll is the same as defined in the first round of PPP. They include:

  • Payment of any retirement benefit (employer cost)
  • Salary, commissions, wages, or similar compensation
  • Allowance for dismissal or separation
  • Payment for vacation, family, parental, medical, or sick leave
  • Payment of cash tips or equivalent  
  • Payment required for the employee benefits such as insurance premiums 
  • Payment of local or state tax assessed on the employees’ compensation 
  • Group benefits including group life, vision, disability, or dental insurance

How To Calculate 25% Reduction In Revenues?

You can calculate the 25% reduction in revenues by comparing the gross receipts of your business before subtracting the expenses. You can compare them for any quarter in 2020 with the same quarter in 2019. 

However, if your business was not in operation during a certain period in 2019, you can calculate the revenue reduction by following the procedure below.

Case 1– Your business was not in operation during the first or second quarter of 2019 but was in operation in the third and fourth quarter of 2019. In such a case, you can compare gross receipts from the third or fourth quarter of 2019 with any quarter in 2020 and determine whether it has reduced by 25%. 

Case 2 – Your business was not in operation during the first, second, or third quarter of 2019 but was in the fourth quarter of 2019. In such a case, you can compare gross receipts from the fourth quarter of 2019 with any quarter in 2020 and determine whether it has reduced by 25%. 

Case 3 – Your business was not in operation in 2019 but was in operation before February 15, 2020. In such a case, you can compare gross receipts from the first quarter of 2020 with the second, third, or fourth quarter of 2020 and determine whether it has reduced by 25%. 

Note – 

  1. Gross receipts for nonprofits and veteran’s organizations have the same definition as gross receipts under section 6033 of the Internal Revenue Code of 1986.
  2. The first quarter runs from January 1 to March 31, the second quarter from April 1 to June 30, the third quarter from July 1 to Sept 30, and the fourth quarter from October 1 to December 31st. 

How To Apply For PPP? 

You can apply for PPP by visiting https://www.sba.gov/document/sba-form-2483-paycheck-protection-program-borrower-application-form and completing the borrower application form. 

Final Words  

Though several details are still unclear about the Paycheck Protection Program, it is expected to provide the much needed financial support to the small businesses throughout the country. Let’s wait and watch what changes or additions the lawmakers make to the PPP in the upcoming days. Until then, collect all the necessary documents required to apply for the program and prepare yourself for the PPP. 

 

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  1. I had trouble getting my proof of self-employment to upload in secure file exchange and finally got it submitted by 12:06 am , 6 minutes late. What are the possibilities that they will deny it? I have received unemployment from March 2020 to some of Jan and some in Feb 2021. Most of Dec, Jan, Feb, March, & april were stopped for this proof of employment.
    Also, I see proof of Income as a 2nd issue but it is always on there. That was not on my TO DO list.
    I feel for u all on ID.ME…

    Anyone trying to reach UI, call their number, press 2 or 3 (questions abt filing a claim?) and then wait thru the message. At the end of it, u will be connected to a live person! I promise.. don’t push another button.. I’ve done it 4 times and it never failed.

    We lost our home, my ex took my child…. (kept her after a visit and called cps facilitating drama while the cops wouldn’t give her back without paperwork locked up in the court house..shut down for covid) I raised her by myself for 12 years & now she is with a violent alcoholic and parental alienating parent .. ….my dog, my 9-year sweet little best friend, was attacked, passing away 3 days later.. all in this time frame.
    But! It will all be ok. I have faith.

    Be grateful for your life and all that is in it today. What u dwell on daily will be your strength or weakness.
    Good luck to all of u.
    And thank you, Jeff, for responding out here. It is appreciated!
    Davulia S.

  2. I filed over two months ago. I have not received any information. My status says “pending resolution”. I have no way of contacting anyone. My position was eliminated at my job and I submitted the documentations online. I dont know what else I can do.

  3. I have been apply Ohio Pua unemployment since July 5th still pending issues. Upload what they ask for when ever I call says your case is in Adjudication. Very very frustrated, financially I am broke. Health issues. Waiting a long period.Don’t know what I will do ?

    1. Nafisa,

      I can understand your situation. There will be a delay considering the number of applications that are being processed. Please continue chasing the office/check your status online at regular intervals until payments normalize.

    2. Same here since Feb 2021 turned in all the documents still pending issues 3 months now. When you call they tell you to be patient. Pulling my hair out it’s so frustrating.

  4. I was receiving PUA unemployment. they made me file for a new claim in February. Now I am in adjudication even though I gave all the same information from my previous claim. Have been adjudication since February and I call and they say they will put in a ticket to have an Adjudicator call me. Nothing. I am wondering If I can go down to to Maryland Unemployment Office and demand that someone talk with me to release my claim for payment. It’s been 56 days. I read that they have a maximum of 45 days.

    1. Luis,

      Your adjudicator may be inundated with pending cases. Please continue to follow up (if you have the contact details) or consider the option of visiting an office in the vicinity if safe and feasible.

    2. t sounds just like mine only im disqualified yet actie every till sept 4th . they haven’t asked me for anything! i file then its disqualified yet im told im ok and have nothing to do bit wait for an answer? answer to what? they switched my program and all and asked me to provide proof for a claim that wa denied al eady back in 2018! deny me once and then again perhaps? lol idk

  5. My mom had unemployment in Florida. She just recently moved temporally to California with a sister since she needs assistance, and now the website is telling her she cannot do anything because she is register in another state. Can she keep filing unemployment in Florida, even if she is living and register now in another state? how is the process to change the unemployment? I tried calling and there is no answer. Thank you!

    1. Stephanie,

      Please ask your mother to consider transferring the UI benefits from FL to CA (details will be available on either of the websites). If there are benefits weeks left in the account, she will be able to claim them.

    1. Leatha,

      UI benefits are offered to claimants who lose employment involuntarily and be able to and available for work.

  6. I lived in ga in 2019 and move to florida in 2020 and work for the xmas months in nov-dec. I was told to do a combine wage claim. my question is which state do i file the claim in?

  7. I filed for pua in Ohio back in October 2020.My claim has been in ajudacatuon since 11/1/20.So 2 to 6 weeks is a total understatement! When I call.i am told to basically hurry up and wait some more.I have recently been redetermined and my claim is allowed.but I have one pending issue.How long is too long?

    1. Nicole,

      Unfortunately, nobody has an answer. There are perhaps thousands of pending applications. Please consider the option of visiting an office in the vicinity if safe and feasible.

  8. If you claim your weeks for unemployment and for the next 2 months you still have not received your money. Where can you go in volusia county to talk with a live person

      1. HI Jeff,
        I applied back in Dec 5th, 2020 and I haven’t received any correspondence, is there a local office that I can make an appt to make certain my claim is right.

        1. Adam,

          You can consider visiting an office in the vicinity if safe and feasible (details will be available on the Unemployment Office’s website).

  9. On NYS DOL website, my claim is saying current yet the information is for my old claim with 0 days remaining despite receiving 2 weeks of payments on the new claim and I was able to certify last night. I haven’t received anything; no letters or emails.

  10. I was disqualified for UI benefits for not providing an ID and other forms of identification. How do I fix this?

        1. Gary,

          You may not be eligible since unemployment insurance is only extended to those who become unemployed due to involuntary reasons.

    1. Hi Mike, I’m in NYS and was at the end of my BYE on 3/14, I was still certifying but wasn’t getting paid. I found out I had to file a new claim because my other was exhausted. I’m still waiting on approval. Maybe you have to file a new claim. I hope this helps.

  11. They say 2-6 weeks it’s more accurate to say 2-6 months; and when you call many of them are rude and unwilling to assist!

  12. someone needs to look into Sharon L. Anton gillette, wyo. or dickinson, nd she is a fraud and has done so many fraudulent things and please look into her

    1. Annette,

      Please report it to the Fraud Division of the Unemployment Office in your state. You can report on the website.

  13. I worked part time for thee years here in florida. I’m currently not working. I’m also retired and collects social security.
    My question is
    Am I qualified to file for unemployment ?

    1. Ruby,

      To be eligible, you’re required to have sufficient hours and earnings. Please use the “Benefits Calculator” available on this website.

  14. So adjudication takes 8 to 12 weeks. Oh okay, that explains why I havent received payment since July. That surely helps just like the rest of the information that you give. And by the way. What’s the NEW reason you can’t get through to the Call Center.

    1. Maria,
      I have gotten through to the call center (live agent) every time i’ve tried calling within the last 2 weeks. The number to a live agent (follow the prompts carefully) is (667)-207-6520. i have gotten through within 10 to 15 mins with each call i had made!

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