Lenders are now accepting applications for the Second Draw PPP loans. Keep in mind that the recent enacted Stimulus Package included a provision that the PPP2 Loan can be both fully forgiven and also not taxable to the business owner.

To be eligible for PPP Round 2, your practice must show at least one quarter during 2020 where the revenue dipped by more than 25% from the same quarter of the previous year.  Most healthcare practices that were forced to close last spring should qualify based on their Q2 numbers.  We gave instructions at: https://schwartzaccountants.com/2021/01/ppp-update/ on how you can create a report in your QuickBooks Online to confirm that your quarterly revenue fell by at least 25%. You are required to include the quarterly revenue for 2019 and 2020 on the Second Draw Borrower application form.

What if your business wasn’t open for all four quarters of 2019? According to the instructions:

  • For entities not in business during the first and second quarters of 2019 but in operation during the third and fourth quarters of 2019, Applicants must demonstrate that gross receipts in any quarter of 2020 were at least 25% lower than either the third or fourth quarters of 2019. 
  • For entities not in business during the first, second, and third quarters of 2019 but in operation during the fourth quarter of 2019, Applicants must demonstrate that gross receipts in any quarter of 2020 were at least 25% lower than the fourth quarter of 2019. 
  • For entities not in business during 2019 but in operation on February 15, 2020, Applicants must demonstrate that gross receipts in the second, third, or fourth quarter of 2020 were at least 25% lower than the first quarter of 2020. 

Other requirements include being open on 2/15/20 and not currently permanently closed, and the business must have spent the full amount of the First Draw PPP Loan. The rules also state that current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant, and the Applicant understand that SBA encourages the purchase, to the extent feasible, of American-made equipment and products.

How Much PPP2 Can You Get?

Business owners can base the PPP2 application on the 2.5 times the average monthly payroll for 2019 OR 2020.  The payroll is capped at up to $100k per employee, plus the employer payments for group health, life, disability, vision and dental insurance, employer retirement plan contributions, and state and local taxes assessed on employee compensation.  Group benefits and retirement plan contributions are excluded for sole proprietors and partners while S-Corps exclude just the group benefits.

Qualified Expenses:

Like Round 1, up to 40% of the PPP2 funds can be spent on non-payroll costs as part of the PPP Forgiveness calculation.  The SBA explains that PPP2 does expand the allowable expenses as follows:

Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, covered utilities, covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures, and not more than 40% of the forgiven amount may be for non-payroll costs. If required, the Applicant will provide to the Lender and/or SBA documentation verifying the number of full-time equivalent employees on the Applicant’s payroll as well as the dollar amounts of eligible expenses for the covered period following this loan.

More information and useful links are available at:

Second Draw PPP Loans:


Paycheck Protection Program Second Draw Application Form:


Paycheck Protection Program How To Calculate Maximum Loan Amounts For First Draw PPP Loans And What Documentation To Provide – By Business Type


Please reach out to your PPP Lender to get the ball rolling. If you want us to prepare the PPP application for you, our fee is $750, discounted to $500 for clients who use our firm’s payroll service.

The deadline to apply for PPP Round 2 is 3/31/21.


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