Special thanks to Erin Meegan from Congresswoman Susan Wild’s office for providing the information below:
Q: Do you need to have first round PPP forgiveness approved before the second PPP loan can be granted?
A: No. Here is the summary on eligibility for a second round PPP loan from the Small Business Committee (document attached):
Section 11: Paycheck Protection Program Second Draw Loans.
- In order to receive a Paycheck Protection Program loan under this section, eligible entities must:
- Employ not more than 300 employees;
- Have used or will use the full amount of their first PPP; and
- Demonstrate at least a 25 percent reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter. Provides applicable timelines for businesses that were not in operation in Q1, Q2, Q3, and Q4 of 2019. Applications submitted on or after January 1, 2021 are eligible to utilize the gross receipts from the fourth quarter of 2020.
Nothing in this, or other sections, states that forgiveness of the first loan is a requirement for receiving a second loan (which makes sense, because that requirement would place a large burden on banks and the SBA to increase the speed with which they will forgive the first round of PPP loans).
Previous resources shared can be found here.