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In response to the economic downturn caused by the COVID-19 pandemic, the United States government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. A key provision of the CARES Act was the Paycheck Protection Program (PPP), which provided forgivable loans to small businesses to help them keep their employees on payroll and cover other vital expenses during the pandemic. However, the initial round of PPP funding was quickly exhausted, leaving many small businesses in dire need of additional support. As a result, there has been much discussion about the possibility of a second stimulus PPP loan.

What Is a Second Stimulus PPP Loan?

A second stimulus PPP loan would be a follow-up to the initial PPP program created under the CARES Act. Like the first round of PPP funding, a second stimulus PPP loan would be designed to provide financial support to small businesses affected by the pandemic. Potential uses for funds include payroll costs, rent or mortgage payments, and utilities. However, there would likely be some differences between the first and second rounds of PPP funding.

What Would Be Different About a Second Stimulus PPP Loan?

One major difference between the first and second rounds of PPP funding is likely to be eligibility criteria. Under the initial PPP program, businesses with fewer than 500 employees were generally eligible to apply. However, there was some confusion and controversy over how to determine employee counts for businesses with multiple locations or franchisees. It's possible that any new PPP legislation would clarify or modify the eligibility criteria to address these issues.

In addition, there may be differences in how the second stimulus PPP loan program treats loan forgiveness. In the initial PPP program, businesses were eligible to have their loans forgiven provided they met certain requirements, such as using at least 60% of the funds for payroll costs. However, there were some discrepancies and criticisms over the forgiveness process, such as delays in processing forgiveness applications or uncertainty over what expenses qualified for forgiveness. Any future PPP program would likely aim to address these problems.

What Is the Status of a Second Stimulus PPP Loan?

As of the end of 2020, lawmakers were still negotiating over a second stimulus bill that would include a new PPP program or other small business relief measures. While there has been bipartisan support for additional small business aid, disagreements over details like funding amounts and eligibility criteria have delayed any new legislation. However, many small business advocates are hopeful that a new PPP program will be included in any stimulus package passed by Congress in 2021.

How Can Small Businesses Prepare?

While the specifics of a new PPP program are still uncertain, small businesses can take steps to prepare themselves for potential funding opportunities.


The COVID-19 pandemic has caused economic upheaval for many small businesses across the United States. A second stimulus PPP loan could provide vital support to those struggling businesses, but the specifics of any new program are still being negotiated. Small business owners should continue to monitor developments and prepare themselves to take advantage of any future funding opportunities.

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