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PPP Funding: Round 2

Updated: Feb 2, 2022

If you're looking for information on how to take advantage of the second round of PPP funding, keep reading.

Named PPP Second Draw, most of the PPP rules have remained the same as before.

You can still apply for the exact same amount of money as the first time, if you'd like.

Here are the changes:


  • 300 or fewer employees (this is down from 500 employees from before).

  • Received and used the full amount of your first PPP loan.

  • Demonstrate at least a 25% reduction in gross receipts in a given quarter as compared to that same quarter in 2019 OR all of 2020 compared to all of 2019.

Businesses that are temporarily suspended or closed are eligible to apply for a Second Draw PPP loan.


The use of PPP funds to cover payroll costs has been expanded to include group insurance benefit payments, covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures. Other approved expenditures that are not payroll are: covered mortgage, rent, and utility payments.

  • Covered operation expenditures include computing services, product or service delivery, costs of payroll expenses, human resources, sales, accounting, and inventory management.

  • Covered property damage costs include costs related to property damage due to public disturbances that occurred during 2020 that are not covered by insurance.

  • Covered supplier costs include expenditures to a supplier pursuant to a contract, purchase order, or order for goods in effect prior to taking out the loan that were essential to the recipient’s operations at the time at which the expenditure was made. Supplier costs of perishable goods can be made before or during the life of the loan.

  • Covered worker protection expenditure. Personal protective equipment and adaptive investments to help a loan recipient comply with federal health and safety guidelines or any equivalent state and local guidance related to COVID-19 during the period between March 1, 2020, and the end of the national emergency declaration.

At least 60% of the PPP must be spent on Payroll in order to obtain forgiveness.

Employee Retention Tax Credit

Changes have been made to this program both increasing the benefit and making it available even if you have received a PPP loan. We are still waiting for details from the IRS ( but information we have so far is below.


  • Operations have been fully or partially suspended or

  • Company has experienced more than a 20% decline in gross receipts for a quarter compared to that same quarter in 2019.

  • Eligibility for this is determined on a quarter by quarter basis so a company may qualify for one quarter but not another.

Companies may now receive a PPP and the ERTC. However, employee wages covered specifically by a PPP can not be counted for the ERTC. For example, a company receives a PPP for $100,000 and total payroll for the quarter is $130,000. The company could spend $60,000 of the PPP on payroll and the rest on other qualifying expenses. The company could then count $70,000 ($120,000-$60,000=$70,000) towards the ERTC.


The ERTC is now a 70% refundable payroll tax credit for wages paid to employees by a qualifying business in a per employee in 2021.


The law has also been changed to allow qualifying companies to look back and claim the ERTC for 2020 which was a max of $5,000 per employee.

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