SBA Releases PPP Loan Necessity Questionnaires
AAFCPAs reminds clients, part of qualifying for the U.S. Small Business Administration’s (SBA) Paycheck Protection Program (PPP) loan meant certifying that the “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” This certification was required by an applicant to be made in good faith when pursuing this loan (which may turn to a grant). The meaning of this statement was a mystery to many potential borrowers.
On October 31, 2020, the SBA released a loan necessity questionnaire for borrowers that received PPP loans of $2 million or more. The loan necessity questionnaire will be utilized by SBA in its review of the PPP borrower’s good-faith certifications of the borrower’s economic need.
PPP lenders who have submitted decisions on loan forgiveness for PPP borrowers will receive notifications through the SBA Forgiveness Platform requesting the completion of the questionnaire. SBA has noted that lenders are not required to verify or validate borrowers’ responses or any required supporting documents.
Each Borrower that, together with its affiliates, received PPP loans with an original principal amount of $2 million or greater is required to complete this form and submit it, along with the required supporting documents, to the Lender servicing Borrower’s PPP loan. The completed form is due to the Lender servicing your PPP loan within ten business days of receipt from your Lender.
The SBA has made it clear that receipt of the questionnaire does not mean that SBA is challenging that certification. After this form is submitted, SBA may request additional information, if necessary, to complete the review. SBA’s determination will be based on the totality of your circumstances.
AAFCPAs advises clients who received a PPP loan over $2 million (when combined with affiliates) to have this information available to provide your lender as soon as reasonably possible. Note, there is also the ability to select which information is confidential and which is not; AAFCPAs advises clients to mark this appropriately.
The loan necessity questionnaires can be found here: Form 3509 For-Profit Borrowers and Form 3510 Non-Profit Borrowers. Each form assesses the business activity and liquidity activity of borrowers.
If you have any questions or need assistance, please contact Janice O’Reilly, CPA, CGMA at 774.512.9046, email@example.com; or your AAFCPAs Partner.