The SBA has recently floated the following draft versions of questionnaires that appear to provide an answer on how they will evaluate “current economic uncertainty.”
When it comes to a Paycheck Protection Program (PPP) Loan, the largest question that remains is:
What qualifies as a “current economic uncertainty” that makes the loan request necessary to support the ongoing operations of the applicant?
For additional background information on this, read PPP FAQ Update #31.
The Small Business Administration (SBA) has recently floated the following draft versions of questionnaires that appear to provide an answer on how they will evaluate “current economic uncertainty”:
Please, note that these drafts are still pending approval from the Office of Management and Budget (OMB).
Here are the key takeaways from the drafts:
It appears that these questionnaires will be mandatory for borrowers with loans in excess of $2, million which are subject to review by the SBA. For more background on these reviews by the SBA, please read our previous articles:
It is also important to note that all loans (not just borrowers and affiliated borrowers with loans in excess of $2 million) are subject to review by the SBA. There is a six-year window, in which the SBA can review an applicant’s loan. Therefore, all borrowers should consider completing questionnaires.
We will continue to keep you apprised as additional information and guidance is provided. If you have specific questions, please reach out to your blum partner or contact us here.
Disclaimer: The contents of this resource are for general informational purposes only. While every effort has been made to ensure its accuracy, the information is provided “as is” and no representations are made that the content is error-free. We have no obligation to update any content, comments or other information for retroactive or prospective interpretations or guidance provided by regulators, financial institutions or others. The information is not intended to constitute legal advice or replace the advice of a qualified professional. There are areas of the CARES Act where additional clarification from the Treasury Department and the SBA is needed. Your judgment and interpretation of the act may be needed. Users should consult with their legal counsel and representatives of the lending institution regarding the proper completion of their application and supporting documentation.