Recently, the Small Business Administration (the “SBA”) began sending a Loan Necessity Questionnaire (the “Questionnaire”) regarding Paycheck Protection Program (“PPP”) loans in excess of $2 million. The Questionnaire is intended to assist the SBA in their evaluation of borrowers’ certification of their economic uncertainty presented by the COVID-19 pandemic which made the PPP loan necessary. Each borrower, together with its affiliates, that received PPP loans with an aggregate original principal amount of $2 million or greater is required to complete the Questionnaire and attach the required supporting documentation.

As part of the forgiveness process, the SBA is sending the Questionnaire to each applicable borrower’s lender. The lender then has five (5) business days in which to notify the borrower in writing that the SBA has undertaken a review of its loan. Once a borrower receives the appropriate Questionnaire from its lender, the borrower has ten (10) business days to complete and submit the Questionnaire to the lender.

Failure to complete the Questionnaire within the allotted time may result in the SBA’s determination of ineligibility for the PPP loan, the PPP loan amount, or forgiveness. The SBA may also determine to seek repayment of the loan or pursue other available remedies. It is therefore imperative to complete the Questionnaire accurately and within the allotted time.

Fortunately, Dvorak Law Group anticipated that borrowers which received large PPP loans would be subject to heightened scrutiny from the SBA in the forgiveness process and previously developed a questionnaire for clients to fill out prior to applying for PPP funds, which greatly resembles the Questionnaire recently released by the SBA. Our firm also developed a process for utilizing completed questionnaires in formulating individualized Executive Summaries for our clients that identified the circumstances related to the client’s good-faith certification of the necessity of PPP funds, including, among other things, identifying the applicable state specific orders that impacted the client. Due to our early development of these documents and processes, our clients are in a strong position to efficiently and correctly complete the SBA’s Questionnaire and provide the required supporting documentation.

The Business and Corporate attorneys at Dvorak Law Group have closely followed the PPP loans and SBA guidance and our clients are positioned to respond to the Questionnaire and obtain forgiveness as soon as possible. We look forward to the opportunity to assist other PPP borrowers in a similar manner.