Legislative Update: Borrowers Receiving $2 Million or More in PPP Loan Proceeds, SBA Releases Loan Necessity Questionnaire

LEGISLATIVE ALERT

SBA Releases Loan Necessity Questionnaire for Borrowers Receiving $2 Million or More in PPP Loan Proceeds

Greetings!

Unfortunately the SBA has once again changed the rules and moved the goalposts on PPP loans.

On October 26 2020, the Small Business Administration (SBA) issued a notice in the federal registry and announced two new forms that will be required to be completed by certain PPP loan borrowers. Form 3509 (www.caltax.com/files/2020/sba3509.pdf) is required for for-profit borrowers who received a loan amount of $2,000,000 or more. Form 3510 (www.caltax.com/files/2020/sba3510.pdf) is required for not-for-profit borrowers who received a PPP loan of $2,000,000 or more.

The new forms will be sent by the PPP lenders to the borrowers, who will have 10 days to complete and return the forms. According to the SBA, the purposes of these forms is to evaluate a borrower’s good-faith certification on their economic need. These forms appear to be an attempt by the SBA to retroactively modify PPP regulations and potentially punish borrowers for not abiding by these new requirements.

Please let us know if you have any questions on the new SBA Forms.

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