- The Small Business Administration has withdrawn its requirement that Paycheck Protection Program borrowers of more than $2 million complete a loan necessity questionnaire.
- The SBA notified borrowers last week it would no longer request the questionnaire and that those previously requested are no longer required. The SBA also advised lenders to close open requests in the PPP computer platform and resubmit open loans.
- The changes are effective immediately, and the SBA said it would release an FAQ shortly with more details.
In May 2020, the SBA mandated that businesses that received loans of more than $2 million complete a questionnaire regarding their operations and financial conditions during the pandemic. It requested information about gross revenues, capital improvement projects, dividend payments and compensation, including whether any employees earn more than $250,000.
The form generated pushback from a variety of business groups. More than 80 associations, including several representing the construction industry, sent a letter to congressional leaders in November, saying that the questionnaire introduced a "confusing and burdensome process" for borrowers and lenders.
The Associated General Contractors of America filed suit in December to compel the federal government to revise the questionnaire.
"The administration has every right, and obligation, to ensure businesses were eligible to apply for and receive the relief loans," said Stephen E. Sandherr, AGC CEO, when the lawsuit was filed. "But they do not have the right to use a secretly crafted form to gather unprecedented amounts of proprietary information that has little or nothing to do with the economic uncertainty that led businesses to apply for the loans in the first place."
In light of the lawsuit, the AGC has been in negotiations with the SBA for the past several weeks, AGC Vice President of Public Affairs & Strategic Initiatives Brian Turmail told Construction Dive. Now that the policy has been rescinded, Turmail said that many of its members with loans of more than $2 million have recently received forgiveness.
Nevertheless, the questionnaire withdraw does not change SBA review procedures for PPP loans, according to legal website JD Supra. PPP loans are still subject to review and borrowers should continue to retain all relevant information and documentation to support their applications, the article said.