The new business questions in the nine-page questionnaire – which SBA says borrowers must complete within 10 business days of receipt – ask for details on quarterly sales, capital expenditures, pays dividends and whether any employee makes more than $ 250,000.
Erik Asgeirsson, president and chief executive officer of CPA.com, said borrowers were not expecting questions when they applied for a loan in the early days of the program.
“There will be a lot of feeling that this is not fair,” he said.
The move – given little explanation by the SBA ̵1; was the latest bright spot on the show as worries grew around whether businesses of all sizes could be able to write off loans as expected.
The Trump administration announced plans to review loans at the end of April after Shake Shack, Ruth’s Hospitality Group and other well-known publicly traded firms were among the first to receive loans in the lane. The show’s initial waves, causing backlash as funding has been depleted.
Congress subsequently spent more money on the program and nearly $ 134 billion was unused on August 8 when the loan rights expired.
In the questionnaire, the SBA said it was looking at loans “to maximize program integrity and protect taxpayer resources”. The agency said in the document that the information “will be used to inform the SBA reviewing your goodwill certification that economic uncertainty makes your loan request necessary to assist your ongoing activities ”.
Failure to complete the form may cause SBA to determine that a business is ineligible and that the agency may request reimbursement “or pursue other available remedies,” according to the form.
The assessment is opening a new rift with banks responsible for loans and it is expected that most will be forgiven.
Tony Wilkinson, president and chief executive officer of the National Association of Government-guaranteed Lenders, said the new process “could become a real mess for lenders and borrowers. borrow.”
Banks will be responsible for entering business responses into SBA’s systems, he said, creating potential risks for mistaking or misinterpreting information provided by borrowers.
“The process of helping American workers cannot forever be one of the ‘gotcha’ moments,” Wilkinson said. “Banks are required to be the government’s distribution system for PPPs – but we continue to be surprised as we step into the process with previously undisclosed new roles for lenders.” . Participating in PPPs becomes a risky proposition for lenders and borrowers with each new policy change. “
For Wilkinson, it is further evidence that Congress needs to revise the program if lawmakers want to revive it as part of the economic bailout.
“Unless Congress makes it clear in a follow-up recovery package that they are going back to PPP and doing comprehensive, no-cost fixes to smooth the PPP process, there won’t be a lot of people giving away. The borrower can continue to participate in any extension or second round of the program, “he said.