FEDA has signed onto a letter from the National Association of Wholesaler-Distributors (NAW) opposing a Small Business Administration (SBA) plan to have Paycheck Protection Program recipients that borrowed more than $2 million fill out a new “economic necessity” form.
Form 3509 is nine pages long and would require detailed financial information and supporting documents from borrowers. Additionally, lenders would have to upload the completed forms to the SBA website in an apparently time-consuming process that would have them respond to a series of questions. The completed form would be due within 10 business days of receipt from the lender.
The SBA says it is in the process of reviewing loans to maximize program integrity and protect taxpayer resources and that the response forms would be used as a part of good-faith certification. Failure to complete the forms could result in the determination that the borrower was ineligible for the PPP loan and any associated forgiveness.
The NAW sent the letter to officials from the U.S. Treasury and the SBA, as well as congressional leaders, encouraging them to reconsider the new form. “The members of our organizations have been on the frontlines both delivering and receiving aid from PPP loans which have been critical to the small business economy over the last eight months,” the letter states. “Unfortunately, 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.”
To read the full letter to congressional leaders, please click here. The letter to the Treasury and SBA may be found here.