---
title: The Paycheck Protection Program in 2021
description: The new deadline for the Paycheck Protection Program is May 31, 2021. Employers can apply for a first draw or second draw loan before the deadline.
image: https://blog.symply.io/hubfs/dan-burton-wHsOV75Xi8Y-unsplash.jpg
---

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HR News & Education

Check out the latest news and resources for small businesses covering topics such as human resources, employee engagement, and management.

# The Paycheck Protection Program in 2021

[Symply](https://blog.symply.io/author/symply)

 Mar 31, 2021 4:41:40 PM

*![dan-burton-wHsOV75Xi8Y-unsplash](https://blog.symply.io/hs-fs/hubfs/dan-burton-wHsOV75Xi8Y-unsplash.jpg?width=1500&name=dan-burton-wHsOV75Xi8Y-unsplash.jpg)*

*\[Update as of March 26, 2021: The Paycheck Protection Program application deadline is now May 31, 2021 (extended from March 31, 2021)\]*

That’s right, we’re still talking about the Paycheck Protection Program– and it remains to be one of the most valuable options available for small businesses today. With the entire loan amount being fully-forgivable when used within the guidelines, it’s a hard one to beat. 

Since the Consolidated Appropriations Act was signed into law, eligible businesses can apply for a maximum of two PPP loans. 

Here is the breakdown of the PPP as it stands today:

### Eligibility and Amounts

First-draw loans and second-draw loans have different eligibility requirements and maximums, so we will discuss them separately.

**First-Draw **

The following guidelines apply to businesses that have not previously accepted a PPP loan.

**Eligibility**

You are eligible for a first-draw loan if:

- You have 500 or fewer full-time, part-time, or seasonal employees
- Your business was operational before February 15, 2020, and remains in operation

**Loan Amount**

The maximum first-draw loan amount is the lesser of:

-  2.5x your average monthly payroll and healthcare costs 
- $10 million

[Find out how to calculate the maximum loan amount for your business type here.](https://linkhcm.slack.com/archives/G0132G5V9K8/p1616003698002900)

**Second-Draw **

The following guidelines apply to businesses that have previously accepted a PPP loan and are interested in applying for additional PPP funding.

**Eligibility** 

You are eligible for a second-draw loan if:

- You have 300 or fewer full-time, part-time, or seasonal employees
- You can demonstrate a revenue reduction of at least 25% in the first, second, or third quarter of 2020 (compared with the same quarter in 2019). 
- You have used or will use the full amount of the first-draw PPP.
- Your business was operational before February 15, 2020, and remains operational.

**Loan Amount**

The maximum amount for a second-draw loan is lesser of:

- 2.5x your average monthly payroll costs and healthcare costs in the year prior to when the loan was received or within the calendar year
- 3.5x your average monthly payroll costs and healthcare costs in the year prior to when the loan was received or within the calendar year for restaurants, bars, and other hospitality and entertainment businesses.

Special considerations for restaurant franchisees, multi-concept operators, and multi-unit operators:

- **Franchisees:** A franchisee that meets the above requirements can apply for a PPP loan. The franchisor does not apply on your behalf, and the $10 million (first-draw) or $2 million (second-draw) cap applies to each franchisee entity.
- **Multi-Unit Operators:** If you own more than one restaurant location operating under the same business entity and employee 500 or fewer employees at each location, you are eligible for a PPP loan— even if your total employee count across all locations is more than 500. Your entire entity’s loan cap is $10 million (first-draw) or $2 million (second-draw). 
- **Multi-Concept or Multi-EIN Operators:** If you own multiple brand concepts or multiple locations of a single brand that operates under separate entities, each entity that employs 500 or fewer employees can apply for a PPP loan. The $10 million (first-draw) or $2 million (second-draw) cap applies to each entity. 

### Loan Forgiveness

The best part about the PPP is that the loans are forgivable if you follow a few rules.

**Forgiveness Guidelines**

To receive absolute forgiveness, you have to:

- Maintain employee counts and salary levels
- Spend **at least** 60% of the loan on payroll costs
- Up to 40% of the loan can be spent on other eligible expenses

**Forgiveness Applications**

Multiple forgiveness applications have been published since the start of the program. Specific applications have a much easier forgiveness process and should be used to your advantage if you meet the requirements.

[The Paycheck Protection Program Forgiveness Application](https://home.treasury.gov/system/files/136/3245-0407-SBA-Form-3508-PPP-Forgiveness-Application.pdf)  
This is the original forgiveness application published and last revised in June 2020 and still in use.   
**Who can use it:** Anyone who has received a PPP loan

[PPP Loan Forgiveness Application Form 3508EZ](https://www.sba.gov/sites/default/files/2020-06/PPP%20Forgiveness%20Application%203508EZ%20%28%20Revised%2006.16.2020%29.pdf)  
This form is known as the EZ Loan Forgiveness Application and is a simpler and more streamlined version of the original application.  
**Who can use it: **Any business that does not reduce employee wages by more than 25% during the covered period (or alternative covered period)

[PPP Loan Forgiveness Application Form 3508S](https://www.sba.gov/sites/default/files/2020-10/PPP%20Loan%20Forgiveness%20Application%20Form%203508S.pdf)  
The Simplified Loan Application was published in October to streamline the forgiveness process for smaller loans even more. The key difference is that borrowers of less than 50k are exempt from forgiveness reductions based on reductions in FTE count and reductions in employee salaries or wages.  
**Who can use it:** Any business that borrowed less than $50,000

Simple Loan Forgiveness Application  
The newest of the loan forgiveness applications is designed to simplify and streamline the process for loans under $150,000. It has not been published yet, but it will be a simple one-page form and making it easier for borrowers to obtain forgiveness.  
The form will require the borrower to sign and certify a description of:

- the number of employees the borrower was able to retain because of the loan
- the estimated total amount of the loan spent on payroll costs
- the total loan amount

**Who can use it:** Any business that borrowed less than $150,000

The bottom line is that the point of the PPP is to help small businesses stay in business and keep people employed. Yes, it is a loan, but it is meant to be fully forgiven. If you approach the program with the mindset of turning it into a grant, it can become just that.  

## Read On

### [7 Biggest Payroll Mistakes that Hurt a Small Business and How to Avoid Them](https://blog.symply.io/7-biggest-payroll-mistakes-that-hurt-a-small-business-and-how-to-avoid-them)

### [How an Owner’s Draw Stacks up Against a Salary (As an S-corp) At some point, there are two essential questions all business owners ask themselves: How do I...](https://blog.symply.io/how-an-owners-draw-stacks-up-against-a-salary-as-an-s-corp)

### [How to Pay Yourself as an LLC Many new business owners have something in common: They're not sure how or when to pay themselves...](https://blog.symply.io/how-to-pay-yourself-as-an-llc)

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