Is There a Second Round of PPP Loans?

Here are answers to some of the most frequently asked questions on such as “Is There a Second Round of PPP Loans?”

How Do I Use PPP for Self Employed?

Well, Jessica, the answer to your question is “No.”  PPP funds are meant to be owner’s compensation for you as a sole proprietor.  To be clear, it’s meant to pay you, so you cannot use the funds to directly pay contracted workers. 

This applies to anyone who files a Schedule C tax form.  Essentially, if you got the correct PPP loan amount, then you pay yourself that money.  I have an entire blog post on how to pay yourself PPP if you’re self-employed.

The good news is you can do whatever you want with the funds after you pay yourself your owner’s compensation.  For example, you can then pay contractors, office bills, or even personal bills.  However, you first need to “pay yourself” so that the PPP funds were used properly and can be forgiven.

Is this somewhat of a formality?  Yes, but I’m giving you the answer of how to think about it and how to use the funds the proper way.

Do You Need an LLC for a Business Credit Card?

This next question is about my article on How to Fill Out a Small Business Credit Card Application for American Express.  Yes, Eric, I got approved.  In fact, lately I’ve been enthusiastically recommending the AMEX Blue Business Plus card to many sole proprietors.

No, you don’t need an LLC or a special tax filing number such as an EIN.  Rather, you apply using your name and social security number as your business information.

Yes, they do a hard pull on your personal credit.  However, business credit cards don’t report to the personal credit bureaus so long as you remain in good standing.  AMEX requires good to excellent credit, so aim for at least 690 before applying.

Currently, this card has a Welcome Offer with an introductory 0% APR on all purchases for the first 12 months.  Here’s a link to apply if you want more information.

How Does the EIDL Grant Affect PPP?

Yes, the latest guidance is that the EIDL grant is no longer deducted from your PPP loan forgiveness amount.  This change allows you to get the EIDL grant and have your entire PPP loan amount forgiven.

While there was a recent announcement that EIDL grants would be made available to those who missed out during 2020, the SBA is not processing these at this time.  Hopefully, more guidance and funds will be made available in the future.

Can You Apply for a PPP Loan with More Than One Lender?

There are thousands of lenders available to help small businesses get PPP loans.  Unfortunately, the SBA can be notoriously slow in terms of processing.  As of this writing, many people are still waiting to receive their second draw PPP loan deposits.

Yes, you can apply with a different lender the second time around.  Many people were dissatisfied with the communication from their previous lenders, so the decision is 100% up to you.  I partnered with Womply to help as many people as possible get approved.

My other suggestion is to reach out to your lender to start a dialogue about the status of your PPP application.  Perhaps, you can email or call to help move things along too.

Can I Get Unemployment and PPP?

This has been a question on everyone’s mind.  No one wants to be caught double-dipping and then having to pay back PPP money or be accused of fraud.

Unemployment is considered taxable income.  This means it will be claimed on your taxes and includes both the money you received from your state’s unemployment office as well as any extra federal payments.

Yes, you can get both.  However, the guidance is not to use the funds at the same time for the same purpose.

To be clear, PPP for the self-employed is considered owner’s compensation.  Even though PPP funds are not considered taxable income, you should not collect unemployment while also paying yourself PPP.

It’s best to decide when to use your PPP funds over the 24-week covered period.  During those weeks, it’s prudent not to collect unemployment.   Remember, the guidance is not to use the same funds for the same purpose at the same time.

You may then collect unemployment when you are no longer paying yourself PPP funds.

Can I Get Both Rounds of PPP Loans?

Yes, you can.  The second draw PPP was introduced early 2021 so businesses could get additional funding.  However, you may also apply if this is your first time getting a PPP loan.

To be clear, this second round is open both to first time applicants and those requesting a second PPP loan.

Eligibility for a second round of PPP funding is dependent upon showing a 25% reduction in gross revenue when comparing 2020 to 2019.  You can use any calendar quarter of 2020 or annual gross receipts for 2020.  There is also specific documentation you will need to provide that I go into more detail about in my other post about PPP 2.

The SBA released helpful guidance addressing calculations and documentation for Second Draw PPP Loans.  I anticipate even more guidance after the initial wave of applications are approved.

Please don’t hesitate to ask questions below in the comments.

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As always, I’m Rich and until next time.

“ has partnered with CardRatings for our coverage of credit card products. and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered. I am not a financial advisor. The information I share is for educational purposes only and shouldn’t be considered as certified financial or legal advice. It is imperative you conduct your own research. I am sharing my opinion only.”

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  1. Hi Rich, I was denied the SBA loan due to unverifiable info, I can do reconsideration. My question is would it be better to do this first before applying for ppp 2? Or does it matter? Reason i ask is I didnt file a schedule c in 2019, thats the biggest problem. So even to apply for ppp2 I would have to amend my 2019 return with schedule c wouldnt I? Or could I try using 2019 bank statements instead? Since refiling is kind of a pain. Thanks

    1. Rich Smith says:

      Hi Jeff, you need that 2019 Schedule C. If you want to wait, then I hear it’s possible to apply with 2020 Schedule C … as soon as you have that filed.

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