On July 29, 2021, the Small Business Administration (“SBA”) updated its guidance to address borrower and lender questions about the implementation of the Paycheck Protection Program (“PPP”).

The SBA announced that it was discontinuing use of the Loan Necessity Questionnaire (SBA Form 3509 or 3510) (the “Questionnaire”). The Questionnaire sought additional information for borrowers seeking loans of $2 million or more, including a liquidity assessment and business activity assessment.

Eighty-two organizations, including the National Restaurant Association, American Hotel & Lodging Association, and banking and CPA organizations, expressed concerns in a letter to Congress that the Questionnaire was intrusive for small business owners and sought unnecessary data in light of the good faith certification already required for PPP loans.

The SBA announced that the majority of public comments had objected to the questionnaire, Ultimately, the SBA determined that the loan necessity reviews could cause delays in evaluating loans and were not necessary.