SBA No Longer Requires PPP Loan Necessity Questionnaire
On July 9, 2021, the SBA confirmed that the Paycheck Protection Program Loan Necessity Questionnaire (Form 3509 used by for-profit borrowers and Form 3510 used by not-for-profit borrowers) is now no longer required for organizations who received PPP loans of $2 million or greater. The form was not required by borrowers whose loan was less than $2 million.
The original purpose of the form was to gather financial information to ensure that borrowers were experiencing the economic uncertainty that made the loan necessary. However, there have been concerns since late last year that the information requested was burdensome to both borrowers and lenders, as well as outside the intent of Congress when the PPP was established. The Associated General Contractors of American filed suit in December 2020 challenging the legality of the questionnaire, which may have triggered the withdrawal of the requirement.
The SBA advised lenders with any outstanding requests for additional information related to the Loan Necessity Questionnaire to close those requests in the PPP platform and submit the loan back to the SBA.
As of May 31, 2021 – the last date on which PPP applications were accepted – the SBA had approved nearly 12 million loans totaling almost $800 billion.
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