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Loan Necessity Questionnaire for PPP Loans over $2M

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Starting from the date of its passage, the Small Business Administration’s (SBA) Paycheck Protection Plan (PPP) has generated a steady stream of questions for everyone involved in the process. 

Today we are again facing many unanswered questions as we share the following preliminary information regarding the next steps for the SBA.  But even as we provide these new details, we draw your attention to the fact that the proposed questionnaires discussed below have not been released by the SBA and are currently in draft form only.

Here is what we know so far:

  • The SBA is in the midst of developing two new loan necessity questionnaires that will be sent to lenders for distribution to those for profit and nonprofit organizations that were granted loans greater than $2 million.
  • According to the SBA, the lenders themselves will not be required to verify or validate any of the borrower's responses that are provided on the loan necessity questionnaires.
  • The forms are SBA Form 3509, Paycheck Protection Program Loan Necessity Questionnaire (For-Profit Borrowers), (view PDF) and SBA Form 3510, Paycheck Protection Program Loan Necessity Questionnaire (Non-Profit Borrowers) (view PDF).
  • These questionnaires are designed to collect supplemental information from the borrowers, whether for profit or nonprofit.  SBA loan reviewers will then use these details to evaluate the good-faith certification that substantiates the necessity of the borrower’s loan request.
  • The forms seek a range of data regarding the business or nonprofit’s revenue, liquidity, continuity of operations, any prepaid debt, employee compensation and other key aspects of the company’s financial situation.
  • Once finalized and published, borrowers will be expected to complete the questionnaire within 10 days of receipt of the form from their lender.
  • If the borrower does not submit the forms by the deadline, the SBA could declare them ineligible for the loan and/or any forgiveness amount claimed.

We want to caution you that there is considerable uncertainty regarding the questionnaires.

By providing you with this ‘sneak preview,’ our goal is to give you the opportunity to understand what may come to pass, and what may be expected of you if you are one of the borrowers with a PPP loan in excess of $2 million.  During this time we encourage you to gather any of the financial and operational records you have maintained throughout the pandemic that will help to explain your situation and support your thought process at the time you applied for the PPP loan. Please feel free to contact us to discuss your specific situation.