ASAE, Business Groups Raise Concerns Over Small Business Lending Questionnaires: Associations Now
The Small Business Administration’s “loan necessity” questionnaires seek information beyond what was required on PPP loan applications and may be biased against borrowers, according to ASAE and other business groups .
The ASAE joined a large coalition of business groups last week to call on the Trump administration to temporarily suspend “loan necessity” questionnaires developed to examine companies that have taken out emergency payday loans during the pandemic.
The Small Business Administration (SBA) has circulated the new questionnaires to obtain information from companies that have taken out Paycheck Protection Program (PPP) loans of $ 2 million or more, and the coalition is concerned about questions that appear to be biased. against borrowers. The nine-page questionnaires ask borrowers for details beyond what they provided in the initial loan applications, including information on quarterly income, capital expenditures, dividend payments, and whether any employees have won over $ 250,000.
The coalition letter was signed by 80 groups, including ASAE, the United States Chamber of Commerce, NFIB, American Bankers Association, National Restaurant Association and many others. The coalition said the CARES law, which established the PPP in March, did not include liquidity or income tests and that the administration now used criteria that went beyond what was required to determine whether businesses needed the money at the time of the request.
In addition to calling on the SBA to suspend the questionnaire, the coalition asked Congress to intervene.
“Our organizations fully support proper review and oversight of PPP loans,” the coalition said. “We also understand that agencies want to do a more in-depth review of certain loans. We strongly encourage you to ensure that all agency review processes are necessary and appropriate to avoid undue burden on borrowers and lenders, possible bias and subjectivity, or regarding deviations from the requirements that borrowers and lenders have understood the law and the original implementation guidelines. We do not believe that the collection of information sought by the new loan necessity questionnaires strikes this appropriate balance.