It is being reported by the Journal of Accountancy that the SBA has formally notified PPP lenders that the loan necessity questionnaire is withdrawn. Per the reporting, the SBA will no longer request Form 3509 or Form 3510 – the loan necessity questionnaires for for-profit and non-profit borrowers.
The withdrawal was first reported by the Associated General Contractors of America (AGC) as a result of a lawsuit it had filed stating the necessity questionnaire was not legal and focused on events that came after the certification of loan necessity.
We expect a release of the notice or an FAQ to be posted by the SBA in short order. For now, borrowers with outstanding loan necessity questionnaires should contact their PPP lender to determine if the questionnaire is still required. In addition, borrowers that, together with their affiliates, have loans of over $2 million may still receive questions from the SBA on loan necessity, just not in the form of this specific questionnaire.
This announcement will be welcome news to PPP borrowers as the loan necessity questionnaire created significant concerns about the SBA requiring repayment of PPP loans due to insufficient financial need and the SBA’s use of gathering data of events occurring after the time of loan application.