Questions Raised By The PPP Loan Necessity Questionnaire

Under the Paycheck Protection Program ("PPP"), borrowers who received a PPP loan in excess of $2 million, whether from a single loan or the combined total of loans from the borrowers' affiliates, have known for a while that their loans would receive increased attention from the Small Business Administration ("SBA"). 

In late April, the SBA announced that it will review all PPP loans in excess of $2 million.  In May, the SBA provided a safe harbor that automatically deems borrowers' certifications that their loan requests were necessary to be "made in good faith."  The bad news?  Those with a PPP loan in excess of $2 million (whether a single loan or the total of all loans received by affiliates) are excluded from this safe harbor.  Instead, these borrowers may show that they had an "adequate basis" for making the good-faith certification on their PPP loan application.  The SBA has suggested that factors such as business activity and access to other sources