PPP Recipient Information Released by the SBA: What you Need to Know about What People Know About Your PPP Loan

PPP Recipient Information Released by the SBA: What you Need to Know About What People Know About Your PPP Loan

By H. Robert Showers, Esq. and William R. Thetford, Esq.

 Last Updated: December 14, 2020

Back in July, the United States Small Business Administration (the SBA) released some information on the recipients of its Paycheck Protection Program loans (PPP loans).[1] “Some information” included simply approximate names of companies and the range of funding they received. This month, December 1, the SBA released further information about its PPP recipients, and the list is extensive. Five separate spreadsheets with 900,000 rows of documentation each were provided to the public with information on entities that received funding.

Many have lobbied Congress and the SBA to limit the amount of information released about loan recipients, though the information was ultimately released in an effort to maintain transparency and limit fraud in the PPP.

An unfortunate byproduct of the release of this data is that marketers or scam artists may use this information to solicit your organization. Therefore, it is important that you are aware of what information may have been released: exact loan amount; precise company name and type of entity (including its status as a non-profit organization); physical address; NAICS code; lending bank; number of jobs reported; the date it was approved for a loan; the race/ethnicity, gender, and veteran status of the business’ owner (if answered on the application); and the entity’s congressional district.

In light of this information, what should you do?

• Do not fall for scams claiming to be contacting you regarding your SBA loan – do not give them your information.
• Do not fall for predatory marketing or other scams. Just because someone contacts you and knows the name of your bank, the loan amount, or the date it was approved, or other information released does not mean that they are from the government or your bank. They could be anyone who has accessed the publicly released information.
• Only give information regarding your PPP loan through the loan forgiveness process directly to your bank or SBA.
• Regardless of the information publicly released, do be aware the SBA will be auditing some of the loans.
• Do maintain accurate document regarding everything you have on your PPP loan as that documentation will be key in navigating the forgiveness process or responding to any audit.
• If you have questions about forgiveness, would like review of your forgiveness application, or are questioned by the SBA please feel free to reach out to Simms Showers, LLP.

Importantly, for organizations receiving over $2 million in PPP loans the SBA has also recently begun sending out a nine-page, 21 question Loan Necessity Questionnaire that many groups and organizations find to be quite burdensome. At present, it appears that the SBA is waiting to send this document out when Borrowers submit their loan forgiveness application. Since you only have a short turn-around window to respond to the Questionnaire, you may want to look at the Questionnaire before you submit your loan forgiveness application.

The new SBA questionnaire appears to ask questions not to support the loan forgiveness application but to determine if  the certification made in the PPP loan application was true: that “Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”

Previously, the SBA has indicated that it will not challenge borrower and lender actions that are consistent with the guidance issued at the time action was taken.

Borrowers and lenders may rely on the guidance provided in this document as SBA’s interpretation of the CARES Act and of the Paycheck Protection Program Interim Final Rule (“PPP Interim Final Rule”). The U.S. government will not challenge lender PPP actions that conform to this guidance, and to the PPP Interim Final Rule and any subsequent rulemaking in effect at the time.[2]

Thus, many churches and religious ministries as well as business in March through May reasonably thought that they would suffer greatly from COVID-19 and its impact although much of the donations and giving have not decreased as substantially as originally predicted by experts.  Some businesses have also not suffered as greatly as predicted while others have suffered greatly, closed or gone out of business.   Thus, the lens through which the SBA should look at the situation is whether the current economic uncertainty at the time the PPP application was submitted made the loan request necessary and not how it has panned out 9 months later.  Please be careful what information you give and consult legal counsel should you receive the additional questionnaire from the SBA and bank. There also may be religious liberty concerns and overly burdensome questions asked of your entity that must be objected to in order to protect your rights or religious liberty.

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Disclaimer: This memorandum is provided for general information purposes only and is not a substitute for legal advice particular to your situation. No recipients of this memo should act or refrain from acting solely on the basis of this memorandum without seeking professional legal counsel. Simms Showers LLP expressly disclaims all liability relating to actions taken or not taken based solely on the content of this memorandum. We thank our Legal Assistant, Josiah Aden, for his help on this article. Please contact Will Thetford at wrt@simmsshowerslaw.com for legal advice that will meet your specific needs.

[1] Sydney Lake, These 16 Va. Companies received $10M PPP loans, Virginia Business (December 2, 2020),  https://www.
virginiabusiness.com/article/16-va-companies-received-maximum-10m-ppp-loans/.
[2] Treasury Department, Paycheck Protection Program Loans: Frequently Asked Questions, last updated Apr. 8, 2020, Question 17, https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequenty-Asked-Questions.pdf.