Second Draw Paycheck Protection Program Loan Information
The Paycheck Protection Program ended on May 31, 2021.
- Existing PPP borrowers may be eligible for PPP loan forgiveness.
- Royal's PPP loan forgiveness application is available from our PPP Loan Forgiveness page.
- Any information provided about Second Draw PPP loans on this or other rcu.org pages is for historical reference only.
About Second Draw Paycheck Protection Program Loans
The Paycheck Protection Program was created to help small businesses pay employees and other expenses during the COVID-19 pandemic. The program has been updated several times since it was initially available, with the most recent legislation providing additional funding for First Draw PPP loans for borrowers who HAVE NOT received a PPP loan before, and Second Draw PPP loans for borrowers who HAVE received a PPP loan. The information below refers to Second Draw PPP loans.
The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan. Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
Full Forgiveness Terms: Second Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:
- 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.
Targeted Eligibility: A borrower is generally eligible for a Second Draw PPP 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.
Maximum Loan Amount and Increased Assistance for Accommodation and Food Services Businesses: For most borrowers, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million. For borrowers in the Accommodation and Food Services sector the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million. Check your tax return for your NAICS code or visit the US Census NAICS page to confirm if your business falls into this category.
Preparing To Apply?
Please follow the steps below to help prepare you for your online PPP loan application with Royal Credit Union.
Step 1: You Must Be A Royal Business Member
- You must be a Royal Credit Union Business Member to apply for a PPP loan with Royal. If you aren't already a Business Member, you must open a business savings account first.
Step 2: Determine Eligibility & Review The Second Draw PPP Application Form
- Generally, to be eligible for a Second Draw PPP Loan, you must:
- Have received a First Draw PPP loan and have used or plan to use the full loan amount for authorized purposes, and
- Have less than 300 employees, and
- Have experienced a greater than 25% reduction in gross receipts during the first, second, third, or fourth quarter in 2020 relative to the same quarter in 2019. See our Revenue Reduction Information page for detailed guidance on how to compare revenue and what documentation is required.
- Your business must’ve been in operation on February 15, 2020 and has not permanently closed.
- Review the Second Draw Paycheck Protection Program Borrower Application Form 2483-SD to determine if your business is eligible and can make all required Representations, Authorizations, and Certifications.
- If you are self employed and file Form 1040 Schedule C, you are eligible to calculate your maximum loan amount using gross income. Review the Second Draw Paycheck Protection Program Borrower Application Form 2483-SD-C.
Step 3: Determine Maximum Loan Amount & Gather Required Documents
- Calculate your maximum loan amount and gather the electronic documents you'll need to provide with your online application.
- Use one of these links to find detailed instructions for calculating maximum loan amounts and determining the required documents for various situations:
- Self Employed, Filing Form 1040 Schedule C
- Farmers And Ranchers Filing 1040 Schedule F
- Partnerships Filing Form 1065
- S Corporations & C Corporations
- Nonprofit Organizations Filing Form 990
- Nonprofit Religious Institutions, Veterans Organizations, and Tribal Businesses That Don't Use Form 990
- Business That Was In Operation 2/15/20 But Not In Operation For The Full One-Year Period Preceding 2/15/20
- See our Revenue Reduction Information page for detailed guidance on how to compare revenue and what revenue reduction documentation is required.
- Additional guidance is available in the SBA FAQ document How to Calculate Revenue Reduction and Maximum Loan Amounts (PDF).
Step 4: Complete “Draft” Of Second Draw PPP Application Form
- Royal will only be accepting applications through our online application process. By completing a “draft” in advance, you will be prepared to transfer that information into our online application forms. This will help ensure a timely submission and review by Royal and the SBA.
- Royal is not able to complete or prepare your loan application.
Step 5: Do You Have Additional Questions About PPP Applications & Documentation?
- Consult with your accountant, payroll provider, and/or other professional to assist in preparing your loan application.
- SBA is hosting informational webinars frequently. Find available PPP webinars on the SBA’s Event Calendar by searching “PPP”.
- Review the SBA’s Paycheck Protection Program webpage or US Treasury CARES website for additional program information and answers to frequently asked questions.
Ready To Apply?
Here is an overview of what to expect during our online PPP loan application process. Royal will provide email communications to borrowers as applications are processed.
- You will request access to Royal’s PPP loan application by using the “apply now” link that will be available on this webpage once our online application is available.
- You will complete our online PPP loan application and upload all required documents.
- Royal is required to review your submitted application and documentation to ensure it meets SBA guidance. We will contact you if additional information is required.
- Royal will submit the application to the SBA electronically for their approval.
- After your application has been approved by the SBA, we follow their instructions to start the process to fund your loan request.
- We will reach out to you for anything else we need to prepare your PPP loan documents.
- Then, we will send an email request to electronically sign the loan documents and fund your loan into your account at Royal.
For More Information
The information on this page is based on SBA’s recently released Interim Final Rule for Second Draw PPP Loans, which provides additional details on the program. To learn more, please review the US Treasury CARES website and the SBA Paycheck Protection Program webpage.
- The content above is intended to be a general summary of provisions based on available SBA guidance. All information is subject to additional regulation and/or changes provided by the U.S. Small Business Administration (SBA) and the U.S. Department of the Treasury. For current guidance or additional information, please visit the SBA website, the U.S. Treasury CARES website, the U.S. Chamber of Commerce Combatting the Coronavirus website, or the other resource on our Emergency Relief Resources For Business Members page.