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.
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