The Small Business

Paycheck Protection Program (PPP)

Paycheck Protection Program (PPP) Round 2

Updated 6/9/2021

Bank of the Sierra can no longer accept Paycheck Protection Program (PPP) loan applications because funding for the program is no longer available. According to the Small Business Administration, the program’s funding has been exhausted for most financial institutions.

Based on revised guidance released by the SBA on March 3, 2021, self-employed individuals who file IRS tax Form 1040, Schedule C may calculate their maximum loan amount using GROSS income. Prior to the guidance, the loan amount was based on payroll costs plus net profits. This change is designed to increase the loan amounts for some small business owners. (Please note that borrowers whose PPP loan has already been approved as of the effective date of this guidance cannot increase its PPP loan amount based on the new calculation methodology.) The guidance also removes the eligibility restriction that prevents businesses with owners who have non-financial fraud felony convictions in the last year from obtaining PPP loans, and removes the eligibility restriction that prevents businesses with owners who are delinquent or in default on their Federal student loans from obtaining PPP loans.

At the end of 2020, lawmakers passed the Consolidated Appropriations Act, 2021, with new economic relief measures in response to COVID-19. The new law includes $284.5 billion in added funding for the Paycheck Protection Program.

Along with restarting the PPP, which provides low-interest, forgivable small business loans to eligible borrowers, the legislation updates the program in important ways. Most notably, it now allows certain borrowers to apply for a second PPP loan, in addition to accepting applications from first-time borrowers.

To help expedite the processing of your PPP loan forgiveness application, we have prepared a checklist to help you determine your eligibility for loan forgiveness. To apply for loan forgiveness, please visit

In this second round of PPP funding, known as “PPP2,” borrowers who already received a PPP loan can apply for a second-draw loan up to $2 million (based on the amount of their payroll) if they meet certain requirements (reduced from a limit of $10 million for first-time PPP borrowers).

To be eligible for a second-draw PPP loan, an applicant must meet ALL the following requirements:

  • Has 300 or fewer employees (or 300 or fewer per location for eligible businesses in the accommodation and food services industry)
  • Has used the full amount of the funds from their first PPP loan before receiving funds from the PPP2 loan
  • Experienced a 25% decline in gross revenue during any quarter in 2020 (compared with the same quarter in 2019), or had overall revenue in 2020 reduced by at least 25% compared to 2019
  • Is not a debtor in a bankruptcy proceeding at the time of the application or at any time prior to receiving the funds
  • We require PPP2 loan applicants to have a business checking account with Bank of the Sierra.

PPP2 will also allow new first-time borrowers, including:

  • Companies with 500 employees or fewer, even if they are eligible for other SBA 7(a) loans
  • Sole proprietors, independent contractors, and self-employed individuals
  • Not-for-profit organizations including churches
  • Eligible businesses in the accommodation and food services industry with 500 or fewer employees per location

The PPP will continue to emphasize each borrower’s payroll expenses. Both the formula to calculate loan amounts (based on average monthly payroll) and loan forgiveness requirements are staying the same. But there are some important updates:

  • Covered expenses now tax deductible. Learn more about claiming tax deductions for PPP-covered business expenses.
  • Simplified forgiveness process for loans up to $150,000. Previously, a streamlined process was available for loans up to $50,000.
  • Higher second-draw loans for accommodation and food services businesses. Loan amounts for eligible borrowers in this industry (NAICS 72) can be up to 40% higher than for other second-draw PPP borrowers.
  • No forgiveness reduction for borrowers with an EIDL grant. Before, participants who also received an EIDL grant had their loan forgiveness amount reduced by the grant amount.
  • More flexible covered period. Instead of using their PPP funds during either an eight- or 24-week covered period, borrowers can choose a covered period that is any amount of time from eight to 24 weeks from when the funds are disbursed.
  • Expanded list of eligible expenses. More business expenses can now be paid for with PPP funds (and are eligible for forgiveness). These are primarily expenses related to helping businesses operate during the pandemic. This expanded list does not apply to borrowers who already submitted a loan forgiveness application for their initial PPP loan.

COVID-19 Information and Safety Protocols

At Bank of the Sierra, we are actively monitoring reports from national, state, and local health officials and taking several precautions at each of our locations to ensure our employees and customers are as safe as possible from the coronavirus.

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Important Disclaimer: Bank of the Sierra wants to support our business customers by providing information and reminders about the Paycheck Protection Program (PPP), which are based on guidance from the Small Business Administration (SBA). Please note that the information we provide is for informational purposes only. We are not guaranteeing its accuracy. We are not endorsing the program nor providing business, legal, or tax advice. There are still uncertainties about the program, and the SBA is expected to release additional guidance. Current information can be found on the SBA’s Paycheck Protection Program webpage.