The U.S. Small Business Administration (“SBA”) has released two Loan Necessity Questionnaires – one for for-profit businesses, the other for nonprofits – for recipients of Paycheck Protection Program (“PPP”) loans of $2 million or more.

The questionnaires are designed to help the SBA evaluate a borrower’s good-faith certification that its loan request was necessary to support ongoing operations.  A borrower that receives a questionnaire from its lender must return the questionnaire within 10 business days.  If a borrower fails to complete the questionnaire, or if the SBA determines the borrower did not have a good faith basis to certify that its loan request was necessary to support its ongoing operations, the borrower’s PPP loan forgiveness application may be denied.

To read the full Alert, visit our website.