What You Need to Know & What AGC is Doing
As previously reported, the U.S. Small Business Administration (SBA) is planning to require all recipients of loans of $2 million or more to complete a questionnaire to demonstrate the need for their loan. This form, based on versions leaked to the media and still in the works, appears to arbitrarily mandate that many borrowers provide proprietary financial information to the SBA. To be certain, AGC of America remains committed to confirming that construction firms were eligible for PPP loans and loan forgiveness as Congress intended under the CARES Act. And we remain committed to blocking the SBA’s efforts to disregard the law via its rulemaking, guidance and threats of federal audit.
What AGC of America Knows about the Loan Necessity Questionnaire
- On October 26, the SBA announced that PPP lenders would send a loan necessity questionnaire to PPP borrowers who received a loan of $2 million or more. Upon receipt, borrowers would have ten business days to complete the questionnaire.
- The SBA has not released a public version of the questionnaire. However, a media outlet published, on October 30, a draft version of the loan necessity questionnaire, found here.
- As of this moment, the SBA has not verified the draft questionnaire, which many accounting, financial and law firms have shared with clients.
- The SBA is still finalizing the questionnaire.
- To simply promote awareness of such an impending questionnaire, lenders have begun to share the draft questionnaire with applicable borrowers.
- To the best of our knowledge and belief, borrowers do not need to proceed to complete the draft questionnaire at this time. Lenders are merely advising their clients that the questionnaire is coming, and again, the SBA has yet to make anything official available to the public.
What AGC of America is Doing about the Loan Necessity Questionnaire
- Putting together a complimentary webinar for AGC members to walk them through the draft questionnaire and the current state of play;
- Working with a top law firm to put the SBA on notice of the considerable legal issues presented by the draft questionnaire;
- Investigating options for potential litigation for if or when a loan necessity questionnaire as arbitrary and capricious as the draft is released and mandated; and
- Taking the lead in organizing a broad and diverse coalition across the business community to push back on Capitol Hill.
Our intention is to continue playing a crucial role in making sure the Paycheck Protection Program remains a successful recovery measure for the construction industry and the broader economy. You can find a detailed account of the many steps we have taken to date to ensure the program protects vital construction jobs and helps members like you during the pandemic-induced economic downturn here.