How Do You Complete a PPP Loan Necessity Questionnaire?

Apr 21, 2021

SBA loan form on an office table.

Months after the PPP rolled out, the SBA published Form 3509, the PPP loan necessity questionnaire that applies to for-profit businesses, along with its non-profit counterpart.

The SBA plans to use these questionnaires to verify the good faith certifications made by the business when it took the loan. Once received, you must complete the nine-page form and return it, along with supporting documents, to your PPP lender within 10 business days.

Now, the good news is that you only need to complete the PPP loan necessity questionnaire if you received a loan of $2 million or more, either as an individual borrower or together with affiliates.

So, here’s what you need to know about Form 3509’s two main components – the Business Activity Assessment and the Liquidity Assessment.

The Business Activity Assessment (8 questions) requests information related to:

  • Revenue in 2020 Q2 and 2019 Q2.
  • Local and/or state shutdown orders.
  • Voluntary alternate operations.
  • Capital improvements.

The Liquidity Assessment (13 questions) focuses on factors regarding the company’s liquidity, including cash and cash equivalents (as of the last day of the quarter before you applied for the PPP), dividends and capital distributions, prepayment of any debt, compensation exceeding $250,000, and if your equity securities are listed on a national securities exchange, among a number of others.

Taxes are difficult and confusing, but we want to help! Download 5 Tax Mistakes That Cost You Thousands to learn about simple ways to reduce your tax bill.