In an effort to obtain the required supporting documentation for Paycheck Protection Program Loans exceeding $2 million, the SBA has published a notice seeking to release two questionnaires, one for for-profit borrowers and one for non-profit borrowers.

The questionnaires will be administered through PPP lenders and are intended to support the borrower's good-faith certification regarding the economic need for funding. Lenders who have submitted loan forgiveness on behalf of impacted borrowers will receive a request for completion of the form from the SBA. A request for completion of the questionnaire doesn't automatically imply that the SBA is challenging the good-faith certification. However, impacted borrowers must complete the form within 10 business days of receipt.

The loan necessity forms do not include any new criteria, but there could be additional scrutiny on borrowers who:

  • Had significant cash on hand at the time of application;
  • Are owned by publicly traded companies;
  • Are owned by private equity/hedge funds/venture capital firms; and/or
  • Compensated employees or owners in an amount that exceeds $250,000 on an annualized basis over the forgiveness period.

The forms are not yet available to the public but can be viewed at the links below. If you are an impacted borrower or have questions, please feel free to reach out to us.

Form 3509 - Loan necessity for for-profit borrowers

Form 3510 - Loan necessity for non-profit borrowers