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SBA is reviewing all loans of $2 million or more, for eligibility, fraud or abuse, and compliance with loan forgiveness requirements. As part of this process, SBA is providing a Loan Necessity Questionnaire to lenders for them to provide to PPP borrowers teceived loans of $2 million or more.
Upon request from their lender, borrowers should return the completed questionnaire to their lender within 10 business days of receipt. Beware The information that borrowers provide on the questionnaire will help SBA assess those borrowers’ certification in their loan application that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant, as required by the CARES Act.
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. SBA’sassessment of a borrower’s certification will be based on the totality of the borrower’s circumstances through a multi-factor analysis. SBA will assess whether the borrower had adequate basis for making the required good-faith certification, based on its individual circumstances in light of the language of the certification and SBA guidance. T
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After a borrower submits its completed questionnaire, SBA may request additional information, if necessary, to complete its review. When additional information isrequested, borrowers will have an opportunity to provide a narrative response to SBA explaining the circumstances that provided the basis for their good-faith loan necessitycertification. SBA will make a final determination that a borrower lacked an adequate basis for its loan necessity certification after reviewing any additional information that a
borrower chooses to submit. This targeted, multi-step approach will ensure the integrity of the evaluation process and expeditious processing, as well as properly allocate SBA’s finite resources to those loans that require additional review.
Jack Craven, CPA