Paycheck Protection Program – Forms 3509 and 3510

In late October, the U.S. Small Business Administration (SBA) requested approval from the Office of Management and Budget (OMB) to collect certain information on borrowers with Paycheck Protection Program (PPP) loans in excess of $2 million. The SBA is accepting public comment on the request through November 25, 2020. 

Of particular note are the Loan Necessity Questionnaire for For-Profit (Form 3509) and Non-Profit (Form 3510) borrowers, surveys intended to assist the SBA in evaluating a borrower’s good faith certification that economic uncertainty made its PPP loan request necessary. 

If these requests for information are approved by the OMB, all borrowers who received a PPP loan of more than $2 million (together with affiliates) would be required to complete one of the forms within 10 business days of receipt. According to samples, failure to complete the form and provide required supporting documentation may result in a determination that a borrower was not eligible for a PPP loan, the PPP loan amount and/or any forgiveness amount claimed. The sample forms also state, however, that receipt of the questionnaire does not mean the SBA is challenging a borrower’s certification, and the SBA’s determination will be based on the totality of a borrower’s circumstances.

Some of the information requested:

  • Q2 2019 and Q2 2020 financial measures;
  • If the borrower was required to shut down or alter operations by a state or local authority;
  • If the borrower voluntarily ceased, reduced or altered operations due to COVID-19;
  • Cash, savings and temporary investments balance as of end of quarter prior to the loan application;
  • Dividends/capital distributions (other than estimated tax payments for pass through entities);
  • Debt prepayments during the loan forgiveness Covered Period;
  • Employees/owners who received more than $250,000 annualized compensation during the loan forgiveness Covered Period;
  • Book value of borrower as of the end of the quarter prior to the PPP loan application (if not publicly traded);
  • Ownership questions (e.g., was the borrower: (a) publicly traded; (b) more than 20% owned by a public company, private equity firm, venture capital firm or hedge fund; or (c) an affiliate or subsidiary of another company);
  • Endowment fund details;
  • Noncash investments, such as equity, bond and real estate holdings;
  • Additional information if the borrower is a school, college or university, or if it provides healthcare services;
  • Any other CARES funds received. 


While these forms have just been released, there have been many initial questions about how the SBA plans on using them and whether the information requested should be relevant to a borrower’s certification of need and liquidity. For example, borrowers may have been faced with an uncertain outlook due to the pandemic at the date of their loan application and made the certification in good faith at that time, but if actual results differed from expectations, should that impact a borrower’s need for the loan at the application date?

Obviously this is an important and evolving situation for many PPP borrowers. We’ll provide updates as information becomes available. 

If you need assistance regarding your PPP loan, visit our dedicated PPP loan page, or reach out to any of your contacts at Schneider Downs, including Joel Rosenthal ([email protected]). 

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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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