First-draw PPP loan limitations:
The maximum amount a business that has not yet received a PPP loan can borrow is the lesser of:
- 2.5 times the average monthly payroll costs and healthcare costs
- $10 million
There may be exceptions to these limits for restaurants and other hospitality businesses.
Second-draw PPP loan limitations:
Any business that is applying for a second draw will be subject to more stringent limitations. The maximum second PPP loan amount is the lesser of:
- 2.5 times the average monthly payroll costs and healthcare costs in the year prior to when the loan was received or within the calendar year
- 3.5 times the average monthly payroll costs and healthcare costs in the year prior to when the loan was received or within the calendar year for any business that is classified under Code 72 by the North American Industry Classification System (NAICS). (This is a list of hospitality and entertainment businesses like restaurants, hotels, and casinos; click the link to get the full list.)
- $2 million
I couldn’t get a first-round PPP loan. Should I try for one in the second round?
Yes, if you are eligible and can adhere to the terms of the loan. With the creation of the new bill, Congress has set aside allocations for community lenders and institutions that can help smaller businesses, businesses owned by POC, and those who operate in lower-income areas access capital.
A portion of funding is being directed to Community Development Financial Institutions (CDFIs) and Minority Depository Institution (MDIs). These are community lenders who have committed to expanding economic opportunity for underserved people. Not only are portions of the PPP allocated for these lenders, but also outside of PPP funds; $12 billion is being routed to CDFIs and MDIs. This means that even if the community lenders in your area aren’t supporting PPP, they may be offering other loans with federal funds under the Consolidated Appropriations Act, 2021.