PPP Second Draw FAQs

Will the money run out?

  • Unknown, but it’s not the race it was the first time around. Based on the experience garnered through PPP #1 and based on the Second Draw PPP loan parameters, Treasury has modeled the demand for First Draw and Second Draw PPP loans and believes there is sufficient appropriation. Further, the SBA and Treasury have allocated $25 billion each for Banks with under $10B in assets (ConnectOne Bank) and for borrowers with less than 10 employees requesting less than $250,000 in loan amount.

I just submitted my Second Draw Application, what documents do I have to upload to the Portal?

  • If you used the same basis to calculate your Second Draw PPP loan amount as your First PPP loan and you indicated 2019 as your based year in the Portal, you do not need to upload supporting documents for Payroll Costs (see definition in Portal sidebar).  You still need to complete the data (amounts, numbers, etc.) in the Portal form, but you do not need to subsequently upload the actual supporting documents if you gave us those documents for PPP1.  If you are using a different basis and different supporting documentation to calculate your Second Draw PPP loan (compared to your first PPP loan) you must upload all Payroll Cost supporting documents (see next question below).


The Portal has a placeholder for each year's documentation (2019/2020).  You must upload evidence of a 25% reduction in revenue.  The reduction in revenue may be measured in several ways (see SBA Second Draw Application page 4) but the primary measurements include:

  1. the applicant had gross receipts during the first, second, third, or fourth quarter in 2020 that demonstrate at least a 25 percent reduction from the applicant’s gross receipts during the same quarter in 2019, or;
  2. the applicant experienced a reduction in annual receipts of 25 percent or greater in FYE 2020 compared to FYE 2019

Document Requirements for Revenue Reduction

  1. If the Borrower chooses an annual comparison 2019 to 2020, borrower must provide Annual Tax Forms.
  2. If the Borrower chooses a quarterly comparison (any iteration discussed in the IFR Second Draw Loansthe borrower must provide any of the following:
    • a. Relevant tax forms (Quarterly income tax filings, etc.), or;
    • b. Quarterly income statements, or
    • c. Bank statements

What if I use a different basis of Payroll Cost calculation for my Second Draw PPP loan than I used for my used my First PPP loan?

  • In this case, you must submit all of the following supporting documentation for Payroll Costs AND evidence of Revenue Reduction (see Q#7 above).

Payroll Documentation – Payroll breaks down into three categories, i. Cash Compensation, ii. Employer Paid State and Local Taxes and iii. Employer Contributions to Employee Health Insurance and Retirement Plans.  Required supporting documents for each category are as follows:

  1. Cash Compensation

For Employers: (i.e. – applicant business has employees for which it paid wages, salaries, etc. as of February 15, 2020, such as Corps, S Corps, LLC’s), borrower must provide:

  • a. IRS Form 941’s; we use Line 5c-column 1 of the 941 for each quarter.

For Sole Proprietors and Independent Contractors:

  • a. IRS Form 1040 Schedule C; we use Line 31 of Schedule C.
  • b. If you have income as an Independent Contractor: IRS Form 1040 Schedule C and IRS Form 1099-MISC.
  • c. Documentation establishing that you were in operation (self-employed) on February 15, 2020.  This may include a IRS Form 1040 Schedule C, IRS Form 1099, an invoice, bank statement, or book of record.

For Partnerships and Partners of the Partnership (has both wages to employees and income from self-employment [for Partners]):

  • a. IRS Form 941; we use Line 5c-column 1 of the 941 for each quarter.
  • b. Schedule K-1's (for each Partner’s Income from Self Employment); we use line 14a as reported on IRS Form 1065 K-1, reduced by section 179 expense deduction claimed, unreimbursed partnership expenses claimed, and depletion claimed on oil and gas properties, multiplied by 0.923537 (max of $100K).
  1. Employer paid state and local taxes

    State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported; we use the sum of employer paid state and local taxes assessed on employee compensation (primarily state unemployment insurance tax).
  2. Employer Contributions to Employee Health insurance and for Employer Contributions Employee Retirement plans

    Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the Borrower included in the Payroll Costs.

What if my first PPP loan is under review by SBA?

  • 1. If a First Draw PPP Loan is under review pursuant to PPP rules and/or information in SBA’s possession indicates that the borrower may have been ineligible for the First Draw PPP Loan it received or for the loan amount received by the borrower, the lender will receive notification from SBA when the lender submits an application for guaranty of a Second Draw PPP Loan (“unresolved borrower”).
  • 2. If the lender receives notification that the Applicant for a Second Draw PPP Loan is an unresolved borrower, the lender will not receive an SBA loan number. SBA will resolve the issue related to the unresolved borrower expeditiously and will notify the lender of the process to obtain an SBA loan number for the Second Draw PPP Loan, if appropriate.

Where is the Forgiveness application for loans under $150,000?

  • The SBA, as part of the new Economic Aid Act signed on 12/27 was/is supposed to have an updated Forgiveness application for loans under $150,000 published by January 20, 2021.  They have not published it yet.  When they do, ConnectOne will Bank will post a digital version to our PPP Portal (same Portal for Forgiveness and Second Draw) and notify all borrowers by email to login and complete the application.

I do not see all of my companies (borrowers) in the CNOB Portal.

  • We will activate all borrowers in your profile in the next 3 hours.  Next time you login be sure to click “Marketplace” in the upper right hand corner of the page.  You will be able to choose the product (Second Draw), then select the Borrower for which you wish to apply. 

I did not get a Round 1 PPP loan; can I apply for Second Draw?

  • No.  All Second Draw applicants must have a First Draw PPP loan.  In general, eligible borrowers that did not apply for or receive a First Draw PPP loan may apply for a First Draw PPP loan though March 31, 2021.  Please inquire with your Lender or Relationship Manager for more information regarding First Draw.

I received a bank statement indicating a balance on my PPP loan.

  • Prior to December 27, 2020 the SBA was required to deduct any EIDL Advance amount (up to $10,000) from the total Forgiveness amount.  The statement may reflect this amount as due.  As part of the Economic Aid Act signed on December 27, 2020 the SBA is no longer required to deduct the EIDL Advance from the Forgiveness amount. All deductions made prior to December 27, 2020 will be funded by the SBA (the timing is not clear, but should happen in the next 30 days).

How can we help you?

Contact a ConnectOne Bank representative to learn more.

You come first. We aren't like those other banks.

At ConnectOne Bank, we understand that little things matter and focus on those things when providing personal and business banking solutions for our clients.