On October 26, 2020, the Small Business Administration (SBA) issued a 30-Day “information collection” regulatory notice (85 FR, 67809-67810) with various forms implementing the Paycheck Protection Program (PPP) loan program under the CARES Act.
Of particular note is SBA Form 3509 – Loan Necessity Questionnaire (For-Profit Borrowers), for borrowers with PPP loans of $2 million or more. The form is to be sent by bank lenders to borrowers after the borrower applies for loan forgiveness. Once the form is sent to the borrower from the bank, the borrower will have only 10 days after receipt of the form to compile the comprehensive responses to the questionnaire. Eventually the answers to the questionnaire will be sent to the SBA for their review and analysis.
Below is a non-scientific compilation of legal and accounting advice relating to the forms. Of particular note among all of them is the requested comparison on 2nd quarter gross revenue between 2019 and 2020, and other issues relating to the good faith application standards of the initial loan application. The advice compiled below counsels early action to be ready for the short response time, careful legal and accounting review of the loan application standards and responses, and other elements of judgment for the loans.
The forms are not listed on the SBA website yet, and are expected to be released on or about November 25th, the close of the comment period. There are some reports that banks already have the draft form and are ready to use it immediately upon approval.
Please review the various advice articles below from: