SBA Releases FAQs on PPP Loan Necessity Questionnaire

(from Venable) On December 9, 2020, the Small Business Administration (SBA) published FAQ Number 53, addressing why certain borrowers will receive Paycheck Protection Program (PPP) Loan Necessity Questionnaires. The SBA also publicly released for-profit and nonprofit questionnaires.

FAQ Number 53 confirms information that appears on the face of the questionnaires:

• SBA is reviewing all loans of $2 million or more, and the questionnaire is part of this process.
• The questionnaire is due 10 business days after a borrower receives it from their lender.
• "A request to complete the Loan Necessity Questionnaire does not mean that SBA is challenging a borrower's certification that is required by the CARES Act."
• The SBA will be applying a "totality of the circumstances test" and conducting a "multi-factor analysis" of the questionnaire responses.

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