Nonprofit Resources
New SBA PPP Loan Necessity Questionnaire for Borrowers with Loans of $2M or More
Nonprofit organizations that applied for and received a Paycheck Protection Program (PPP) loan were required to make a good faith certification on their PPP loan application that economic uncertainty made the loan request necessary to support ongoing operations. Now the Small Business Administration (SBA) has created a questionnaire it is using to gather information to assess the validity of the good faith certification made by nonprofit organizations.
The questionnaire asks for a wide variety of information, including:
- The organization’s second quarter 2020 actual income and expenses;
- Information on all sources of liquidity at the quarter end date immediately preceding the date of the borrower’s loan application;
- For organizations with restricted net assets and endowments, information on how such restrictions limited access to those funds to pay payroll costs, mortgage interest, rents, and utilities (PPP loan qualifying expenses);
- Information regarding any shutdown of an organization’s operations or alterations of its operations, whether mandatory or voluntary, and any costs incurred relative to alterations in its activities;
- Schools, including elementary schools, high schools, and colleges and universities, are required to provide information on their median tuition and how their tuition revenues differed between the 2018-2019 academic year and the 2019-2020 academic year; and
- Information regarding assistance received under other provisions of the CARES Act.
A substantial amount of supporting documentation is required to be submitted in support of responses to the questionnaire.
Organizations that receive this questionnaire have 10 business days to respond.
This questionnaire is only being sent to organizations with PPP loans of $2 million or more. The SBA has provided no guidance as to how it will use the information to make a determination that an organization’s certification of necessity was made in good faith. We are monitoring this new development and will keep you informed as we learn more.
If you receive this questionnaire, please reach out to us for assistance with completing and reviewing it before submission. Please contact your engagement team or contact us online for more information.
