The Small Business Administration (SBA) has issued intensive new Loan Necessity Questionnaires for recipients of forgivable Paycheck Protection Program (PPP) loans that the Insights Association (IA) warned could inadvertently make the forgiveness process even more confusing and cumbersome for small businesses in the insights industry who received PPP loans to “preserve as many jobs as possible, despite the fallout from the COVID-19 pandemic.”
In asking SBA and the Treasury Department to withdraw them, IA said that the new SBA questionnaires “make the process for borrowers even more confusing and burdensome and could lead SBA and Treasury to inappropriately question thousands of qualified PPP loans made to struggling small businesses in the insights industry.”
IA continued: “Under the new requirements, PPP borrowers receiving loans of $2 million or more need to complete one of two versions of the new Loan Necessity Questionnaire (SBA Forms 3509 for for-profits or 3510 for non-profits) and produce extensive documentation to support their responses. Currently, the questionnaires only apply to loans of $2 million or more that have been submitted to SBA for forgiveness; however, without clear guidance in an Interim Final Rule, IA is concerned about what types of review processes could be imposed on lower-level borrowers. The new process hasn’t been explained in any official regulations or SBA procedural notices, and the questionnaires have not been posted on the Treasury or SBA websites.”
While IA “supports appropriate review and oversight of PPP loans,” the association noted that the existing applications “already demand a fair amount of documentation demonstrating how PPP borrowers retained or re-hired employees in the weeks after receiving PPP funds and throughout the covered loan period.” This should be enough to give “SBA and Treasury plenty of relevant information to investigate the proper use of PPP loans received.” Demanding a ton more than that threatens commitments made by the agencies, lenders and borrowers under the rules of the CARES Act.
The Insights Association urged SBA and Treasury “to suspend use of these unnecessary new questionnaires while considering better solutions. Any rash changes could chill interest among our members in pursuing necessary loans in the future that may prove necessary for keeping hundreds or thousands of employees in the insights industry workforce.”