Paycheck Protection Program: Creating Certainty Out Of Uncertainty From The Rearview Mirror

SBA's Proposed Loan Necessity Questionnaires Provide Scrutiny for PPP Loans in Excess of $2 Million

The Small Business Administration ("SBA") is accepting comments until November 26, 2020 (Thanksgiving) on two proposed loan necessity questionnaires for Paycheck Protection Program ("PPP") loans in excess of $2 million: SBA Form 3509 For-Profit Borrowers and SBA Form 3510 for Non-Profit Borrowers. The questionnaires, once finalized, will likely be the first step in the SBA's review process of PPP loans in excess of $2 million to evaluate whether necessity certificates contained in these PPP loan applications were made in good faith.

The proposed questionnaires seek supplemental information regarding how a borrower's business activities were affected by COVID-19 and a limited liquidity assessment. The SBA does not elaborate on how that new information will be used or how it fairly will apply across industries and companies within the same industry that were not