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New Round of Paycheck Protection: SBA Application, Rules for First and Second Draws, Eligibility and Parameters

Recording of a 90-minute premium CLE video webinar with Q&A

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Conducted on Wednesday, February 24, 2021

Recorded event now available

or call 1-800-926-7926

This CLE course will discuss PPP lending as recently revised and expanded under the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the New PPP Act or the Act). Panel discussion will include the new eligibility requirements and lending parameters, procedures for existing PPP borrowers to obtain second draws, and tax treatment of expenses paid with PPP loans.


The New PPP Act, signed into law Dec. 27, 2020, makes significant changes to the Payment Protection Program (PPP). The new legislation appropriates an additional $284.45 billion for initial and "second draw" PPP loans applied for by Mar. 31, 2021. It also makes significant changes in lending parameters, borrower eligibility, loan forgiveness, and tax-deductibility of expenses, which should be closely examined by finance counsel.

PPP borrowers with 300 or fewer employees and 25 percent or more in reduced gross receipts from 2019 to 2020 in any calendar quarter may apply for a "second draw" PPP loan of up to the lesser of $2,000,000 and 2.5 times (3.5 for some borrowers) their monthly payroll costs. The SBA's affiliation rules will be applied on the same basis as the initial loan.

Interim final rules released by the SBA on Jan. 6, 2021, provide specifics on new types of businesses that may obtain PPP loans and some that are no longer eligible. They also guide borrowers who returned previous PPP loans to apply for loans and lender underwriting responsibilities concerning initial and second draw loans made under the Act.

Loan forgiveness provisions have also been revised. Eligible costs now include covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures. Expenses properly paid from PPP loan proceeds are now tax-deductible. For loans of $150,000 or less, the Act provides a streamlined, one-page application that includes a certification that the borrower has complied with the PPP.

Listen as our authoritative panel analyzes the New PPP Act's many facets and the key takeaways for borrowers and lenders.



  1. The New PPP Act--funds available and timeline
  2. Borrower eligibility
    1. Business types added
    2. Business types excluded
    3. Size of business parameters
    4. Demonstrated losses in revenue
  3. Second draw loan procedures
  4. Loan forgiveness
    1. Covered period
    2. Eligible expenses
  5. Tax treatment
    1. Deductibility of expenses paid with PPP funds
    2. Employee retention tax credit


The panel will review these and other relevant issues:

  • What does the Act say about borrower eligibility for PPP funds, and how does it differ from the initial PPP?
  • What are expanded categories of eligible expenses, and what is the impact on loan forgiveness?
  • How have lender underwriting requirements been revised under the Act?
  • What advantages have been written into the Act for small borrowers and loans under $150,000?


Colom, Kiamesha-Sylvia
Kiamesha-Sylvia G. Colom

Taft Stettinius & Hollister

Ms. Colom focuses her practice in the areas of real estate transactions (acquisitions, dispositions, development,...  |  Read More

MacDonald, Ralph
Ralph F. (Chip) MacDonald, III

Of Counsel
Jones Day

Mr. MacDonald is a financial services lawyer who focuses on M&As, public and private securities, governance, and...  |  Read More

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