Questionnaire on the necessity for a PPP mortgage (new FAQ) | Wendel Rosen LLP
On December 9, 2020, the US Small Enterprise Administration (SBA) and the US Treasury Division (“Treasury”) up to date a set of FAQs relating to the Paycheck Safety Program (“PPP”). The FAQ has been up to date to incorporate FAQ # 53, which discusses certification of the necessity for a PPP borrower.
As we already know, the SBA critiques all PPP loans of $ 2 million or extra (and different loans, if relevant) to find out their eligibility, fraud, or abuse, and to adjust to mortgage cancellation necessities. As a part of its overview course of, the SBA asks debtors who, together with their associates, have acquired PPP loans of $ 2 million or extra to finish a mortgage want questionnaire. The questionnaires are administered by PPP lenders. On the request of their lender, debtors ought to full and return the questionnaire inside 10 working days of receipt. And though the FAQ makes use of the phrase “ought to” reasonably than “should”, it’s not identified if there will probably be any antagonistic penalties of not finishing the questionnaire or returning it after the ten working day interval. Nonetheless, warning strongly suggests respecting the ten working day deadline.
The ASB’s evaluation of a borrower’s necessity certification will probably be primarily based on the borrower’s complete state of affairs. In a earlier FAQ, the SBA mentioned it might assess whether or not a borrower has an satisfactory foundation for doing the required good religion necessity certification, primarily based on their particular person circumstances. on the time of the PPP mortgage request, regardless that subsequent developments have made the PPP mortgage not obligatory. Nonetheless, the brand new FAQ casts doubt on this overview course of by stating that the ASB can overview the state of affairs and actions of a PPP borrower. after obtain the mortgage.
As soon as the borrower has submitted their questionnaire on the necessity for a mortgage, the SBA could request further data to finish their overview. When further data is requested, debtors will probably be given the chance to offer a story response explaining the premise for his or her good religion certification.
In abstract, reasonably than clarifying current steering or offering new steering, the brand new FAQ provides to the uncertainty of the SBA PPP mortgage overview course of.
 The SBA has but to make clear what standards it’ll use to find out which different PPP loans will undergo the extra overview course of.
 See FAQ # 46.
 “In its overview, the SBA could take note of the circumstances and actions of the borrower earlier than and after certification of the borrower as it will help the SBA in figuring out whether or not the borrower has accomplished the statutory certification required of the borrower. good religion on the time of its mortgage. software. “FAQ n ° 53.