The Small Business Administration (SBA) released on October 26, 2020, a Loan Necessity Questionnaire as part of the Paycheck Protection Program (PPP) review process. This questionnaire (SBA Form 3510) will be sent to all nonprofits who received a PPP loan of $2 million or more by their lender, and nonprofits will have ten business days to complete the questionnaire. This questionnaire is intended to provide the SBA with information regarding a nonprofit’s “good-faith certification” as to the organization’s need for the PPP loan.
In addition to requiring general information about the nonprofit (including the loan principal and loan number), the questionnaire requires “yes” and “no” answers to two assessment areas: activity assessment and liquidity assessment. Several of the questions also require the nonprofit to submit supporting documentation including gross receipts and expenses. For more information, the questionnaire can be accessed here: SBA Form 3510.
The SBA cautioned that a nonprofit’s failure to complete the form and provide supporting documentation may result in the SBA’s determination that the borrower is ineligible for either the PPP loan, the PPP loan amount, or any forgiveness amount claimed. Furthermore, failure to complete the form may result in the SBA seeking repayment of the loan.