No More PPP Necessity Questionnaires

Wendel Rosen LLP

Wendel Rosen LLPOn June 28, the Office of Management and Budget repealed the requirement that Paycheck Protection Program (PPP) borrowers with loans of $2 million or more must complete a Loan Necessity Questionnaire as part of their PPP loan forgiveness application.

On July 2, the Small Business Administration (SBA) officially advised PPP lenders that they would no longer be required to obtain Loan Necessity Questionnaires (SBA Forms 3509 and 3510) from borrowers with PPP loans over $2 million.

However, best practice is to maintain detailed documentation regarding your PPP loan eligibility and necessity. We also recommend documenting all of your expenses covered with PPP funds in the event of a possible loan audit.[1]

Reminder that you can apply for PPP forgiveness any time up to the maturity date of the loan. As of June 2020, Congress granted all borrowers the option of a 24-week covered period. After your covered period ends, you have 10 months before payments on the loan are required. If you do not apply for forgiveness within 10 months after the last day of the covered period, then you must begin making loan payments to your PPP lender.

[1] The Treasury and SBA have created a “safe harbor” for borrowers that received less than $2 million in PPP funds. However, the SBA may still review any borrower’s PPP loan at any time.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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