The Small Enterprise Administration has begun asking some Paycheck Protection Program debtors to doc why they needed the loans, drawing concern from advocacy and commerce teams that say such disclosures weren’t required when the companies utilized for assist.
The Mortgage Necessity questionnaire is aimed toward debtors that took loans of $2 million or extra underneath PPP, the federal authorities’s most important coronavirus-aid initiative for small companies. It directs them to reply questions on enterprise exercise and liquidity.
The shape says the questions will assist the SBA consider a certification debtors made after they utilized for assist. The certification acknowledged that financial uncertainty made the mortgage request essential to assist enterprise operations. However the mortgage software didn’t specify what the SBA meant by “financial uncertainty” or how debtors would display their want, based on Mike Kennedy, basic counsel on the Related Common Contractors of America, a commerce group.
Mr. Kennedy stated the questionnaire “basically strikes the purpose put up.” For instance, it asks debtors whether or not they have been topic to a government-mandated, coronavirus-related shutdown and the way a lot money that they had available earlier than taking the loans, questions that weren’t a part of the unique software.