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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 Brittany Besler, MBA, CPA, Esq. at 774.512.9001, bbesler@nullaafcpa.comJanice O’Reilly, CPA, CGMA at 774.512.9046, joreilly@nullaafcpa.com; or your AAFCPAs Partner.

About the Authors

Brittany Besler
Brittany possesses a unique combination of tax, legal, and business backgrounds, and is a valuable member of AAFCPAs’ Tax practice. She provides tax planning, research, and compliance solutions for corporations, partnerships, nonprofits, individuals, estates & trusts. Brittany advises businesses and individuals on various federal, state, local and foreign tax-related issues, including counseling clients on the consequences of new and updated tax laws. She assists clients in the creation of appropriate and optimal organizational structures, and advises on tax planning and tax exemption compliance. She advises newly-formed and well-established nonprofit clients on meeting compliance requirements of various government agencies, including the IRS rules on fundraising and political activities.
Janice O'Reilly CPA
Janice is a Partner in the Consulting Division of AAFCPAs and leader of the Managed Accounting Solutions (MAS) practice, which provides “right-size” outsourced accounting solutions, from cloud-based bookkeeping to CFO deliverables, designed to optimize the effectiveness of the modern finance function.  Public, privately-held, and nonprofit organizations value the pragmatic assessment, infrastructure set-up, and flawless execution of their accounting & finance deliverables—all completed with the resources and technical expertise of AAFCPAs’ full-service CPA and consulting firm. Janice is a charismatic leader and collaborative senior finance and business executive with an entrepreneurial approach to problem solving, and extensive global operating experience.