On October 26, 2020 the SBA released a notice announcing their intention to release two new PPP Loan Forgiveness forms. The Form 3509 – Loan Necessity Questionnaire would be used by for-profit borrowers and the Form 3510 – Loan Necessity Form would be used for non-profit borrowers. Both forms are related to the good faith certification and economic need for the PPP Loan.
Here is what we know so far:
- These forms are only for borrowers who along with their affiliates have PPP loans of $2,000,000 or more.
- Neither form is available on the SBA website but borrowers have begun to receive the forms from their lender
- In general, the forms request information to assess:
- The business activity of the borrower, the form asks for information regarding gross revenue (or gross receipts in the case of a non-profit) along with supporting documentation
- The liquidity of the borrower, the form asks for information such as the cash position, employees/owners paid over $250,000, distributions or dividends paid, etc.
- The forms are due within 10 days of receipt from the lender
Due to the short deadline for responding to these forms, we suggest that borrowers with loans of greater than $2,000,000 to use the list below to begin to gather the following information. Please note that this is not an exhaustive list. For more information, please see Form 3509 or Form 3510
- Gross revenue or gross receipts for Q2 2020
- Gross revenue or gross receipts for Q2 2019 (if not in business at that time, gross revenue in Q1 of 2020)
- Information related to shutdown orders by state or local authorities due to COVID-19, if applicable
- Information on any capital improvement projects not related to COVID-19 that took place between March 13, 2020 and the end of the loan forgiveness covered period.
- Six-digit NAICS code
- Cash and cash equivalents total as of the last day of the quarter immediately before the PPP loan application
- Dividends paid or distributions paid between March 13, 2020 and the end of the covered period (except distributions for estimated tax payments)
- Information on prepayments of debt between March 13, 2020 and the end of the covered period
- Information on employees and owners paid more than $250,000 (on an annualized basis) during the covered period
- For publically traded companies, market capitalization on the date of the PPP loan application
- For non-publically traded companies, book value (or shareholders’ equity value) as of the last day of the calendar quarter immediately before the PPP loan application
Have questions? Don’t hesitate to contact us, our SBA Assistance team is available to guide you through any questions you may have.