SBA Announces Changes In PPP Loan Forgiveness Process

SBA Eliminates Loan Necessity Questionnaire for Loans over $2 Million

The Small Business Administration recently announced that Paycheck Protection Program ("PPP") loan borrowers will no longer need to submit a Loan Necessity Questionnaire as part of their forgiveness application. This is a notable development given the shifting need certification standard of the PPP program. Initially, in order to receive a PPP loan, an applicant was required to make a good faith certification that the pandemic's uncertain economic conditions necessitated a PPP loan. Then, in October 2020, after borrowers already received loan disbursements based on the "good faith" certification, the SBA issued guidance that appeared to alter that standard by seeking to assess a borrower's business operations and liquidity. Specifically, the SBA required borrowers that received PPP loans in excess of $2 million to certify their needs for PPP loans via SBA Form 3509 (Loan Necessity Questionnaire for