SBA Unveils Necessity Questionnaire for PPP Borrowers of $2M or More
The Small Business Administration (SBA) has announced a Necessity Questionnaire for borrowers who received Paycheck Protection Program (PPP) loans of $2 million or more. The questionnaire, not yet published, aims to review the economic necessity 'meta' made during loan application. Borrowers must complete it within 10 business days of receipt from their lender.
The SBA has not yet provided details on when the Necessity Questionnaires will go into effect or be sent to borrowers. However, it has outlined the questionnaire's purpose and requirements.
Companies acting as dealers, modifying medical devices, or placing them on the market under their own name must fill out the questionnaire, taking on manufacturer 'my business' responsibilities. This applies from the time they engage in these activities, requiring partial auditing and certification by a notified body.
Borrowers should gather required documentation, review and complete the form before submitting a forgiveness application, and consider seeking legal advice. The questionnaire asks about business activity and liquidity, including changes in operations, capital improvements, dividends, debt repayment, and employee compensation.
Failure to submit the form could result in the SBA determining the borrower was ineligible for the loan or forgiveness amount, potentially leading to repayment or other remedies. The SBA has not yet provided guidance on how it will review and evaluate the information requested.
The SBA's Necessity Questionnaire is a crucial step for PPP borrowers who received loans of $2 million or more. While the questionnaire is not yet published or sent, borrowers should prepare by collecting necessary documents and understanding the form's requirements. The SBA's review of the information provided will help determine loan forgiveness and borrower eligibility.
