Although we know that many borrowers have already applied for forgiveness, it is worth noting that the Associated General Contractors of America, Inc. (the “AGC”) just released a statement confirming it learned through settlement negotiations that the Small Business Association (the “SBA”) intends to withdraw the Paycheck Protection Program (“PPP”) Form 3509 Loan Necessity Questionnaire (For-Profit Borrowers) (“Form 3509”) in the wake of the lawsuit. Further, the AGC notes it has received an exceptionally large number of reports about the SBA approving loans in excess of $2,000,000 for forgiveness. We also are aware of several companies with loans in excess of $2,000,000 that have been forgiven. As of June 25, 2021, the SBA has yet to release a statement confirming AGC’s statement. We also assume that any withdrawal of Form 3509 will lead to a withdrawal of Form 3510.
In October 2020, the SBA announced its intent to require borrowers to justify their good faith economic uncertainty certifications and received the Office of Management & Budget’s (“OMB”) approval to require Form 3509 and Form 3510 from PPP borrowers receiving a loan of $2 million or greater requesting forgiveness. The questionnaires asked for current bank statements and information about current liquidity. In December 2020, The AGC filed suit against the SBA and OMB, alleging the requirement of the questionnaire for forgiveness was arbitrary and capricious given that it is requesting information that does not have any bearing on evaluating the borrower’s good faith statement for necessity of the loan at the time it made the certification.
We will continue to monitor this development. If you would like more information on the SBA forms mentioned above, please contact a member of our Corporate practice group at 585.232.6500 or 716.853.1616.