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PPP Loan Stacking Fraud Lawyers

March 12, 2022 PPP Loan Fraud

The PPP program was setup to help businesses weather through the pandemic. Businesses were required to apply for the PPP loan, and use it for qualified business expenses only. Unfortunately – the PPP loan hasn’t been the most straightforward process for business owners.

There have been many changes to it, and issues.

One of the biggest issues has been that during the early days of the pandemic, many people applied for PPP loans with SEVERAL lenders at the same time.

In some instances, people were funded multiple times for a PPP loan. This, in effect, resulted in borrowers get double, or even triple, funded for a PPP loan.

This is essentially known as PPP loan stacking.

If you accidentally engaged in PPP loan stacking, it’s likely the SBA, IRS, DOJ, and potentially other state agencies are investigating you – and are likely to charge you.

PPP loan stacking is not the same as the second PPP draw offered

The initial PPP program was open until August 2020. It helped many businesses. On December 27, a new bill was signed which gave a second stimulus package. This included a second PPP loan for businesses who already used up the first PPP loan – if they met certain criteria.

Businesses who tried getting the second PPP draw – should not worry about PPP loan stacking.

The main concern is for businesses who applied with multiple lenders for a PPP loan – and then took the PPP loan from multiple banks.

If you engaged in PPP loan stacking fraud, it’s likely you’ll be dealing with a number of other potential charges as well. If you engaged in any of the following, you could be prosecuted for these offenses as well, such as:

  • Loan stacking
  • Application inaccuracies
  • Improper use of funds
  • Misrepresenting info to banks

This can result in a number of charges being filed against you such as

  • Mail fraud
  • Wire fraud
  • Tax fraud
  • Bank fraud

and more

If you’re charged with PPP loan stacking, it’s critical you do not delay.

If you engaged in PPP loan stacking, do not take any decisions on your own. Get legal advice, hire an attorney – who can help you. Just because you have not been charged yet doesn’t mean there is not an investigation into you. Investigations take a long time to happen, and be conducted. Often investigation can last years. As a result, it’s important you hire a criminal defense lawyer who can proactively work to ensure no charges are filed against you.

There were two rounds of PPP loans 

As the PPP program entered it’s final month, business owners were keen to get more funding. There are two types of PPP loans – first and second draw loans. First draw loans are those who didn’t get a PPP loan before, with some requirements. Some business owners received a first draw, and then applied for a second draw loan. The short answer is, there were two rounds of PPP loans. It is not illegal to get both rounds of PPP loans.

You cannot apply for a second draw loan until receiving your first draw loan, and either spending all of it, or creating a plan for how you will spend it and document this plan. To qualify for the second draw loan, you have to spend your first draw loan on eligible expenses like payroll, utilities, rent. Once you spent your first draw loan, or documented the plans to do so, you have to meet other requirements for second draw loans.

Bottom line – PPP loan stacking is only ok if you applied for the 1st draw and 2nd draw separately.

If you applied multiple times FOR THE SAME draw, and take multiple loans DURING the same draw – this is known as PPP loan stacking.

The SBA, and other government agencies will come after you.

We recommend you proactively speak to our PPP loan stacking fraud defense lawyers today.




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