November 3, 2020
By Robert Jackson, CPA | COVID-19 Response Team
Last week, the SBA announced that it will be issuing two new questionnaires for those borrowers who, together with their affiliates, received Paycheck Protection Program (PPP) loans of $ 2,000,000 or greater. The questionnaires are designed to help the SBA determine the extent of loan necessity for the borrower. One questionnaire is to be completed by nonprofits, and the other is to be completed by for-profits. While every borrower meeting the $ 2,000,000 requirement must complete the questionnaire, questionnaires are due within 10 business days of receipt of the form from your lender. Thus, the time for completing the questionnaire will be dictated by your lender.
It is not clear at this point when the lender is to provide these forms to the borrower since it is not related to forgiveness – it is related to receiving the loan in the first place. Because we do not know when your lender will send you the form, we suggest you work on this form now due to the 10 business day deadline (unless you already know when your lender will be sending you the form). In addition, since many of you receive notifications from your lenders via e-mail – please continue to check your spam/junk mail so that you do not miss the deadline. The SBA has indicated a broad range of penalties for not completing the form timely, ranging from impacts on your forgiveness to concluding you were ineligible for the PPP loan.
While some borrowers have previously documented their reasons for obtaining the loan, they will find that they now must complete this new questionnaire based on how the SBA views necessity, and may not be able to utilize all of the information they previously prepared (although in addition to the standard questions – a borrower can provide additional comments in the business activity assessment or liquidation assessment sections, but they are limited to 1,000 characters each). The questionnaires are very involved, and borrowers will find themselves spending a significant amount of time to complete the questionnaire.
As of this morning (Tuesday, November 3, 2020), neither the SBA or Treasury has yet to post the forms on their websites as they customarily do – and there has been no additional guidance issued by the SBA.
You will find links below to the forms, as well as links to the affiliate rules that must be reviewed in determining whether you meet the $2,000,000 test. Contact our COVID-19 Response Team for additional questions.
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