Was your loan necessary? Or did you have other sources of liquidity to support operations?
Everyone was worried about their businesses when COVIN-19 struck and the SBA was offering Paycheck Protection Relief (referred to as PPP). Many businesses applied and generally ignored language in the CARES Act that the loan was “necessary to support the ongoing operations…”
SBA Forms are now out! They will be requiring, through lenders, for affiliated businesses who received $2 Million or more in PPP loans to file the new Form 3509 (for profit) or Form 3510 (non-profit). The forms have many questions to evaluate the good-faith certification you made on your PPP Borrower’s Application. It appears that the questionnaires will only be one component of the SBA review, and that borrowers will have a change to further prove the necessity during the process, like contemporaneous records that explain the situation at the time of application.
While SBA is requiring only businesses with all affiliated loans totaling $2 Million or more…WATCH OUT small businesses!
It is understood that SBA loan reviewers may be randomly auditing smaller loans as well and will use the same Form Questionnaires. Additionally, other agencies may challenge smaller loans as well.
Be Prepared! Speak to your advisors and watch for more information to be forthcoming.