ASAE joined a large coalition of business groups this week in calling on the Trump administration to temporarily suspend “loan necessity” questionnaires developed to scrutinize businesses that took emergency payroll loans during the pandemic.
The Small Business Administration (SBA) has been circulating the new questionnaires to obtain information from businesses that took Paycheck Protection Program (PPP) loans of $2 million or more, and the coalition is concerned about questions that appear biased against borrowers. The nine-page questionnaires seek details from borrowers beyond what they provided in initial loan applications, including information on quarterly revenue, capital expenditures, dividend payments and whether any employees earned more than $250,000.
The coalition letter was signed by 80 groups including ASAE, the U.S. Chamber of Commerce, NFIB, American Bankers Association, National Restaurant Association and numerous others. The coalition said the CARES Act, which established the PPP in March did not include liquidity or revenue tests and that the administration is now using criteria beyond what was required to determine whether companies needed the money at the time of request. In addition to calling on the SBA to suspend the questionnaire, the coalition has asked Congress to intervene as well.
“Our organizations are fully supportive of appropriate review and oversight of PPP loans,” the coalition said. “We also understand the agencies would like to conduct further review into certain loans. 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. We do not believe that the information collection sought by the new Loan Necessity Questionnaires achieves this appropriate balance.”