The SBA recently offered guidance regarding Paycheck Protection Program (PPP) loans totaling $2 million or more, RVDA noted in a posting on its website.
Affected PPP recipients will be required to complete a questionnaire, as well as provide documentation that supports and substantiates the good-faith certification borrowers were required to make on the original PPP loan application.
The original application required borrowers to certify that, as of the date on the application, “economic uncertainty made the loan request necessary to support ongoing operations.”
The questionnaire addresses the “uncertainty” and the “necessity” of the loan, which differs from the eligible expenses substantiation in the loan forgiveness application.
The questionnaire collects information that allows the SBA to assess the COVID-19 National Emergency Declaration, issued by President Donald Trump on March 13, impact on the borrower. That information includes gross revenue and normal business operations altercated during the specific covered period. Operational questions address mandated state restrictions, voluntary responses, disruptions and additional costs as the declaration’s result.
Additional information regarding business liquidity and funds used for discretionary distributions, compensation in excess of $250,000 (annualized), debt pre-payment or capital improvements during the covered period is required.
SBA recommends preparing a written narrative to document the uncertainty in one’s industry and community, as well as its impact on each operations area, including sales, supply chain, overhead, workforce, etc. This, along with the completed questionnaire, will act as original certification support, SBA stated.
