SBA Releases New PPP Loan Necessity Questionnaire

In what is likely the first step in the audit process for nonprofit borrowers that received Paycheck Protection Program (PPP) loans of more than $2,000,000, the Small Business Administration (SBA) will begin sending loan necessity questionnaires.

To refresh, nonprofit organizations that applied for and received a PPP loan were required to make a good faith certification on the loan application that economic uncertainty due to the COVID-19 pandemic made the loan request necessary. Now the SBA has created the new PPP Loan Necessity Questionnaire to assess the validity of the good faith certification.

As part of the forgiveness process, the SBA is sending the Questionnaire to each borrower’s lender. Once a borrower receives the Questionnaire from its lender, the borrower has ten (10) business days to complete and submit the Questionnaire along with supporting documentation to its lender.

According to the instructions, “Failure to complete the form and provide the required supporting documents may result in SBA’s determination that you were ineligible for either the PPP loan, the PPP loan amount, or any forgiveness amount claimed, and SBA may seek repayment of the loan or pursue other available remedies.”

At this time, the questionnaire is not available on the SBA website, but a copy can found here.

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