On October 26, 2020, the SBA announced its intent to require a loan necessity questionnaire (“Necessity Questionnaire”) for borrowers that received PPP loans of $2 million or greater. The Paycheck Protection Program (PPP), contained within the CARES Act signed by President Trump on March 27, 2020, provided forgivable loans of up to $10 million to qualifying small businesses. The SBA intends to use the Necessity Questionnaire as part of its promised review of the economic necessity certification required on PPP applications for loans greater than $2 million and relates to the certification of “economic necessity” for both for-profit borrowers and non-profit borrowers. The SBA has not yet provided guidance on how it will review and evaluate the information requested in the Necessity Questionnaire or how it will determine whether a borrower properly certified economic necessity. Companies should become familiar with the information that the SBA is requesting and pay close attention to any new guidance the SBA may release regarding the Necessity Questionnaire or the loan forgiveness forms.
10 Nov '20