The Associated General Contractors of America (AGC) said that the U.S. Small Business Administration (SBA) is in the process of removing the requirement that Paycheck Protection Program (PPP) borrowers submit a Loan Necessity Questionnaire when applying for forgiveness on loans of $2 million or more.

A lender notice from an SBA district office also indicates that at least one version of the questionnaire is no longer required, but an SBA spokesperson said the agency had no comment on whether the questionnaire has been withdrawn.

The general contractors group has been in negotiations for several weeks to settle a lawsuit it filed in December 2020 challenging the legality of the questionnaire and the process used by the SBA and the Office of Management and Budget (OMB) to develop, approve, and publish it. In a statement dated June 23, the AGC’s CEO, Stephen Sandherr, said that the AGC had learned the SBA had started the process to completely withdraw the questionnaire.

Asked via email for more details, Brian Turmail, the AGC’s vice president of Public Affairs & Strategic Initiatives, said that the group learned about the SBA’s plans from the U.S. Department of Justice, the federal agency with which the AGC is negotiating the possible termination of its lawsuit against the SBA.

“The Justice Department informed our lawyers that the SBA has already begun the process of withdrawing the questionnaire by submitting a formal request to OIRA [Office of Information and Regulatory Affairs],” Turmail said. “Once that is finalized, the SBA will make a formal announcement about the fact via updated frequently asked questions. Not sure what the timing will be on that, but the Justice Department officials made it quite clear that the form is being withdrawn.”

The loan necessity questionnaire comes in two versions: SBA Form 3509, Paycheck Protection Program Loan Necessity Questionnaire (For-Profit Borrowers), and SBA Form 3510, Paycheck Protection Program Loan Necessity Questionnaire (Non-Profit Borrowers). A lender notice sent out by the SBA’s West Virginia District Office and shared with AICPA & CIMA said, “We have received information that SBA Form 3509, Loan Necessity Questionnaire, is no longer required.” The SBA declined to comment on the notice.

The SBA introduced the new forms in November. Later that month, the AICPA was among 80 organizations that signed a letter urging Congress, Treasury, and the SBA to temporarily suspend use of the questionnaires because of concerns about the types and time frames of information requested. The AICPA sent another letter the following week to the OMB and the SBA expressing concerns that Forms 3509 and 3510 were burdensome and not reflective of Congress’s intent when it established the PPP in March 2020.

The SBA stopped accepting applications for PPP loans on May 31. Over 14 months, the program provided about $800 billion in forgivable loans to nearly 12 million businesses. CPAs have played a key role in assisting borrowers through the application and forgiveness processes.