ABA today joined a broad coalition of groups from various industries in a letter to the Small Business Administration and Treasury Department raising concerns about the loan necessity questionnaires that SBA is using to evaluate borrowers’ good-faith certification of their economic need for Paycheck Protection Program loans.
SBA rolled out the questionnaires—which included separate versions for nonprofit and for-profit entities—last month to borrowers with loans totaling $2 million or more. However, the groups noted that the forms ask for information—such as quarterly revenue and employee earnings—that is unrelated to what borrowers were asked to consider when they applied for their PPP loan.
Accordingly, the questionnaires “introduce a confusing and burdensome process for both borrowers and lenders, and we fear that it could lead the agencies to inappropriately question thousands of qualified PPP loans made to struggling small businesses,” the groups said. They requested that SBA and Treasury temporarily suspend use of the questionnaires, which are currently out for public comment until Nov. 25, “while we collectively address these issues and work together toward a better solution.”
The groups further detailed their concerns in a letter to congressional leaders. “We strongly encourage you to ensure that all agency review processes are necessary and appropriate to avoid undue burden on borrowers and lenders, possible bias and subjectivity, or concerning departures from requirements borrowers and lenders understood from the statute and original implementing guidance,” the groups told lawmakers. “We do not believe that the information collection sought by the new loan necessity questionnaires achieves this appropriate balance.”
