Paycheck Protection Program – Loan Necessity Questionnaire FAQ

Schneider Downs continues to track the evolving landscape of federal financial programs offered in the wake of the business disruption caused by the coronavirus crisis. In November we wrote about the release of Forms 3509 and 3510, which were intended to assist the U.S. Small Business Administration (SBA) in evaluating a borrower’s good-faith certification that economic uncertainty made its Paycheck Protection Program (PPP) loan request necessary. On December 9, the SBA released a new question-and-answer document related to the PPP that provides clarity on the agency’s intentions and process behind loan necessity questionnaires.

Why are some PPP borrowers receiving a Loan Necessity Questionnaire (SBA Form 3509 or 3510)?

Borrowers with loans in excess of $2 million (including affiliates) are being requested to complete the Loan Necessity Questionnaire to assist the SBA in reviewing loans for eligibility, fraud and abuse and loan forgiveness requirements. Borrowers “should” complete the questionnaire once requested by the lender within 10 business days.

The completion of the questionnaire is not the SBA challenging the borrower’s certification. The agency recognizes that it has a limited amount of resources, and its intention is to accumulate information it believes is relevant to borrowers’ certification in their loan application that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant,” as required by the CARES Act.

The SBA is taking a multistep approach in reviewing the certification, the first part of which is the borrower’s completion of the appropriate questionnaire. Upon review of the 3509 or 3510, the agency may request additional information, with which the borrower should comply and where they will have opportunity to provide additional narrative responses. If necessary, the SBA will then make a final determination that a borrower lacked an adequate basis for its loan necessity certification after reviewing any additional information that a borrower chooses to submit.

If you need more information or assistance regarding your PPP loan, visit our website at, reach out to any of your contacts at Schneider Downs or contact Joel Rosenthal at [email protected].

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The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

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