On December 27, the President signed the Consolidated Appropriations Act, 2021 (CAA 2021) which included increased funding for the Paycheck Protection Program and allows for previous borrowers to request a “second draw.” The recently enacted COVID relief bill permits PPP2 loans to be issued immediately.

Keep in touch with your lender to understand when they anticipate accepting applications.

PPP2 Highlights:

  • Targets businesses who experienced a 25% decline in gross revenue in any quarter of 2020 over 2019
    • Special rules exist for new businesses; reach out to cares@brinkersimpson.com for more information if you need assistance determining if your new business is eligible
  • Loan amount of up to 2.5X average monthly payroll costs for 2019 or trailing 12 months  (up to $2 million)
  • Restaurant / hotels
    • Businesses with the NAICS code beginning 72 are eligible for 3.5X average monthly payroll and waived affiliation rules
  • 501(c)(6) organizations are newly eligible
  • Expands expenses eligible for forgiveness
  • Program ends 3/31/2021

Estimates indicate at least 50% of first round PPP borrowers could be eligible for round 2.  As a result, we suggest preparing now to ensure you are able to submit as soon as the program begins accepting applications.

In order to be eligible for PPP2 you must:

  • Have 300 or fewer employees
  • Have used or will use full amount of first PPP loan
    • NOTE – some lenders are requiring forgiveness applications be submitted before they will accept an application for PPP2 – reach out to your lender to understand their policy
  • Demonstrate at least a 25% reduction in gross receipts in any quarter of 2020 relative to the same quarter in 2019.

We advise creating a schedule to test your receipts on a quarterly basis to confirm you are eligible.  See example below where the second quarter confirms eligibility for PPP2.




% Change

Q1 $  110,000 $  125,000


Q2 $    92,000 $  126,000


Q3 $  123,000 $  136,000


Q4 $  120,000 $  127,000


Specific details are not yet available about what documentation will be required to demonstrate eligibility based on a decline in gross revenue.  We suggest compiling a quarterly profit and loss, bank statements, sales tax returns and / or other information to prepare for the application.  We will keep you updated as we learn more details about what lenders will require.

NOTE: The CAA 2021 relief bill included a special provision to allow borrowers with loans under $150,000 to submit a certification attesting to the require revenue loss.  However, those borrowers will be required to provide documentation to support eligibility with the forgiveness application. 

After determining eligibility, we suggest following a process similar to and compiling documents based on your first PPP application.

Preparing to apply for PPP2:

  • Calculate average monthly payroll costs for 2019 or trailing 12 months including:
    • Newly added / clarified Group Life, disability, vision, and dental
    • Gross wages
    • Health insurance
    • Retirement contributions
    • State and local tax assessed on compensation
    • Include owner compensation based on entity type and 2019 earnings
  • Create a summary sheet detailing payroll costs and benefits over the 12 months and the calculation to determine your requested loan amount (2.5X the average monthly payroll costs)
  • Compile a file with support documents the lender may require including:
    • Payroll reports
    • Payroll tax filings
    • 2019 year end Payroll reports
    • 2019 Schedule C / Schedule K-1/ W-2  for owner compensation

PPP Overview / Refresher:

  • Forgivable loans based on 2.5X monthly average payroll costs
  • Forgivable amounts are not included in gross income and otherwise eligible expenses are deductible
  • interest rate of 1% (CAA 2021 requires interest rate to be non-compounding)
  • Maturity of 5 years.
  • Loan payments deferred
  • No collateral or personal guarantees are required
  • No fees charged to lenders or borrowers
  • 60% of the loan must be used for eligible payroll costs

Brinker Simpson & Company has a team utilizing the AICPA loan tool to assist our clients in preparing to submit their PPP2 applications.  Please reach out to cares@brinkersimpson.com if you would like assistance or if you have questions.