02.25.2021 | Articles / Publications
Callie Whatley Discusses Second-Draw PPP Loans for Business Alabama
Callie Whatley authored an article published by Business Alabama on February 19, 2021 discussing what businesses need to know about the PPP loans available through March 31 under the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Aid Act).
One feature of the Economic Aid Act is that businesses who previously secured PPP funds may apply for a second draw.
“Second draw PPP loans work much like the first draw PPP loans, but with targeted eligibility and lower maximum loan amounts,” Whatley said. “With the benefit of 10 months of perspective on the effect of the COVID-19 pandemic on American businesses, the Economic Aid Act attempts to tighten the reigns on the PPP program, while still providing the relief opportunities desperately needed by so many small businesses.”
The Economic Aid Act allows eligible businesses to apply through March 31, whether it is a first or second draw of PPP loans. Notably, the Act has expanded eligible and forgivable loan uses, while retaining the provision that 60% of proceeds must be spent on payroll for the loan to be forgivable.
For second draw loans specifically, eligibility has been narrowed such that recipients cannot have more than 300 employees and must demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.
For the full article, including more details on the application process and requirements, please click here.*