NAFCU, trades flag issues with PPP loan necessity questionnaires
NAFCU joined with dozens of trade groups Tuesday to caution the Small Business Administration (SBA), Treasury Department, and lawmakers on the burdens "loan necessity" questionnaires could have on paycheck protection program (PPP) lenders and borrowers.
The SBA late last month announced that, for PPP loans over $2 million, lenders who have submitted loan forgiveness decisions for these borrowers would soon receive questionnaires. While the SBA has the ability to review all PPP loans for fraud, the agency said it will review borrowers' good-faith certifications for all loans over $2 million.
The questionnaires are being sent to lenders via the SBA's Forgiveness Platform for borrowers to complete; however, lenders are not required to verify or validate any of the borrowers' responses or supporting documents to these questionnaires.
In the letters sent Tuesday, coalition of trades argued that "the questionnaires introduce a confusing and burdensome process for both borrowers and lenders, and we fear that it could lead the agencies to inappropriately question thousands of qualified PPP loans made to struggling small businesses."
"…[W]e would request that you consider temporarily suspending use of these questionnaires while we collectively address these issues and work together toward a better solution," the groups wrote. "This seems especially helpful considering that SBA is currently soliciting public comment through November 25 to determine 'whether the collection of information is necessary,' and the best approach to do so if deemed necessary. A temporary suspension could help avoid increasing borrower and lender confusion and concern as they attempt to comply with the process while simultaneously providing feedback on it. This action should fit well within your existing plans to be responsive to stakeholder feedback collected during the comment period."
In the letter to Congress, the trades also outlined several areas that could help simplify and streamline the loan forgiveness process and ensure lenders and borrowers are fully aware of the process.
NAFCU continues to advocate for measures that would simplify the PPP loan forgiveness process for loans under $150,000 and address the issue of EIDL advances being deducted from a borrower's forgivable PPP amount.