No More PPP Necessity Questionnaires

On June 28, the Office of Management and Budget repealed the requirement that Paycheck Protection Program (PPP) borrowers with loans of $2 million or more must complete a Loan Necessity Questionnaire as part of their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, the safest course is for borrowers 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. Should there be a future audit it will be much easier to make a compelling presentation if the analysis and documentation was completed and retained. [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.

If you have any questions, please do not hesitate to reach out to our Wendel team.

[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.