The Small Business Administration (SBA) has developed two draft questionnaires, one for nonprofit borrowers and one for for-profit business borrowers, that will go to Paycheck Protection Program (PPP) borrowers with loans, together with their affiliates, totaling $2 million or more. The form would need to be filled out within ten days of receiving it from the lender to support the loan’s necessity. These draft questionnaires are part of the SBA’s review of the program, specifically a review of good-faith certifications and the economic need of loan recipients meeting the $2 million threshold. Lenders will issue these when finalized versions are released. The questionnaires are linked below:

• SBA Form 3510 – Nonprofit Questionnaire
• SBA Form 3509 – For-Profit Questionnaire

Here are some highlights that borrowers will be required to report from the current draft of the new SBA Forms:

Business Activity Assessment

• Gross revenue for 2020 Q2
• Gross revenue for 2019 Q2
• Multiple questions on various ways that business operations were mandatorily or voluntarily changed since March 13, 2020.

Liquidity Assessment 

• Amount of cash available on the last day of the previous quarter before the loan application.
• Amount of equity distributions, besides pass-through tax payments.
• Amount of any debt pre-paid.
• Any employees compensated, on an annualized basis, more than $250K.
• Any owners compensated, on an annualized basis, more than $250K.
• Book value of equity on the last day of the quarter before the loan application.
• Additional CARES funding received by the company.

When the loan was received:

• Did a publicly-traded company own more than 20% or more of any class of equity?
• Was 20% or more of any class of equity owned by a private equity firm, venture capital firm, or other hedge fund?

Most of the questions included on the forms refer to the time between March 13 and the ending date of the covered period. Some of the requested items will require additional documentation to be provided to the SBA. These forms are still in draft form. Some commentators are concerned that the survey only provides hindsight information to the SBA and does not include the high level of uncertainty that existed back in April when many companies were applying and receiving these loans. The SBA is collecting comments on these forms through November 25, 2020.

Please note that the SBA may update this form in the coming weeks. The entire Aldrich team is monitoring PPP updates and guidance and will notify you if and when those changes occur. We’ll be updating our PPP Resource Center diligently to keep you apprised of changes as they happen. If you have any questions about applying for PPP loan forgiveness, reach out to your Aldrich Advisor.

This article was written with the most current information as of November 2, 2020. Please check back for future updates when further guidance and eligibility are released.

• Loan Forgiveness Relief for Small Businesses (March 2020)
• The Federal Reserve Main Street Lending Program (April 2020)
• Follow-Up Steps for Paycheck Protection Program (PPP) and Other Recent Payroll Tax Incentives (April 2020)
• Paycheck Protection Program Update — $310 Billion Added (April 2020)
• Breakdown of the PPP Loan Forgiveness Application (May 2020)
• Paycheck Protection Program Flexibility Act Signed into Law (June 2020)
• SBA Revises Paycheck Protection Program Interim Final Rules (June 2020)