The Small Business Administration (SBA) has issued a notice that it intends to release two new forms regarding the Paycheck Protection Program (PPP). These forms are for borrowers whose PPP loans had an original principal amount of $2 million or more.
They are questionnaires, which were designed to evaluate the good-faith certification made on PPP borrower applications. Essentially they are evaluating whether the borrower’s economic uncertainty made the loan necessary.
There are two forms; Form 3509 is the questionnaire for non-profit borrowers, and Form 3510 is the for-profit questionnaire. Each of the forms are broken down into two sections: business activity and liquidity. Some of the questions ask about the businesses’ gross revenue, time spent shut down (mandated or otherwise), how operations were altered because of COVID, and other such questions.
It is important to note that none of these questions are set in stone. They are drafts that have been released by the SBA and they are open for comments in the Federal Register until 11/25/20.
Once the forms have been finalized and a borrower receives one from the lender, borrowers must complete and submit it to the lender within 10 business days. If the borrower fails to do this, then the SBA may seek repayment of the loan.
Qualified borrowers should therefore review the draft questionnaire and plan accordingly in order to be prepared for when they receive these forms.
