Small Business Administration Abandons "Loan Necessity Questionnaire"

AGC

On July 29, the Small Business Administration (SBA) formally announced that it is “discontinuing” the “Loan Necessity Questionnaire” that long burdened all applications for the forgiveness of Paycheck Protection Program (PPP) loans of over $2M.  In response to a “Frequently Asked Question” that SBA has just posted on its web site, the agency explains that it has “received 61 comments from members of the public” on the form and that “the majority of the comments raised objections” its use.   SBA also acknowledges that its “loan necessity reviews” of all PPP loans over $2M “are lengthy and have caused delays beyond the 90-day statutory timeline for forgiveness , thus negatively impacting those borrowers that made their loan necessity certification in good faith.”

 AGC of America sued SBA last December for developing the form entirely in secret, and without public input, and for using the form to change the de facto requirements for the forgiveness of PPP loans over $2M.  In response, SBA finally released the form to the public and reopened the period for public comment on its particulars (which SBA had somehow decided to solicit even before releasing the form).  Since April of 2021, AGC and SBA have been trying to negotiate a settlement of that lawsuit, and in the course of those negotiations, AGC learned that SBA had begun the process of discontinuing the form.  At the same time, AGC began to receive reports that SBA was finally beginning to grant applications that AGC members had filed months earlier.  The formal announcement that SBA is “discontinuing” the form closes the loop and renders it likely that AGC of America will quickly bring its successful lawsuit to a quiet conclusion.