The second round of Payroll Protection Program (PPP) is rolling out this week. The PPP, approved by Congress in late December, provides for $284 billion in new loans. This latest round of loans — called the “second draw” — comes five months after the first two rounds of funding ended.

This time, however, applicants are being prioritized, much as COVID-19 vaccines are going to frontline professionals and the elderly. Starting on Jan. 13, lending institutions whose customers are minority-owned or economically disadvantaged will go first. Within a few days, possibly the following week, the applications will be open to all business owners who meet the following criteria:

  • 300 or fewer employees;
  • Experienced a 25% drop in gross revenue between the second quarter of 2019 and the second quarter of 2020;
  • Have spent the full amount of the first loan on allowed expenses.

There are other details, said Keys Federal Credit Union CEO Maggie Sayer, but overall the process is less of a “race” than the other funding cycles, where the funds were gobbled up in record time, often by large corporations.

“Before, we uploaded the loan application and if everything was correct, we were issued a Small Business Administration loan number,” Sayer said. “The whole process has changed, as well as the platform. Before the SBA provides a loan application they do some of the verification first. We don’t know how long this is going to take.”

Bankers are telling their clients that if they received funding in the first two rounds, they should apply for forgiveness to speed up the chances of a second draw. 

One other notable difference, Sayer said, is that some restaurants can qualify for larger loans because the multiplier on the monthly payroll amount is higher — 3.5% instead of 2.5%.

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