Withdrawal of SBA loan necessity questionnaire for PPP loans
FINANCIAL REPORTING INSIGHTS |
Authored by RSM US LLP
The U.S. Small Business Administration (SBA) recently discontinued the use of SBA Form 3509, Loan Necessity Questionnaire (For-Profit Borrowers), and SBA Form 3510, Loan Necessity Questionnaire (Non-Profit Borrowers), to evaluate the certification made by a Paycheck Protection Program (PPP) loan borrower that economic uncertainty made the loan request necessary to support ongoing operations. See further information published July 29, 2021 in Question 69 of the SBA PPP loans FAQ.
Withdrawal of the loan necessity questionnaire requirement does not mean that the SBA is no longer auditing whether borrowers met the forgiveness conditions. As discussed in more detail in our white paper, Borrower’s accounting for Paycheck Protection Program loans, the accounting considerations related to a PPP loan do not end upon forgiveness of the loan by the SBA because whether a borrower truly qualified for a PPP loan and met the conditions necessary for forgiveness of the loan could be audited by the SBA up to six years after it forgives the loan (depending on the amount of the loan and the requirements being audited). To emphasize, the SBA’s forgiveness of a PPP loan does not eliminate the possibility of it auditing the loan and requiring repayment of some or all of the forgiven amount as a result. As such, after the SBA forgives a PPP loan or it has otherwise been derecognized, but while the PPP loan is still subject to audit by the SBA, consideration should be given to the loss contingency guidance in Topic 450, “Contingencies,” of the Financial Accounting Standards Board Accounting Standards Codification both from a disclosure and recognition perspective.
Call us at (800) 624-2400 or fill out the form below and we'll contact you to discuss your specific situation.
This article was written by RSM US LLP and originally appeared on 2021-07-30.
2021 RSM US LLP. All rights reserved.
RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.
Weinlander Fitzhugh is a proud member of the RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.
For more information on how Weinlander Fitzhugh can assist you, please call (989) 893-5577.