Howard Zangwill, CPA, Managing Director of Audit and Accounting in the Oakland office.
Howard ZangwillCPA / Partnerview bio

PPP Borrowers of $2million, the SBA will soon Come Knocking


RINA Alert --  November 6, 2020 | Volume 18, Issue 32 
November 9, 2020
This article has been revised to reflect that SBA Form 3508EZ
can be used by the self-employed, independent contractors and sole proprietors and  borrowers who did not reduce employee levels, wages or hours.

Recently, the Small Business Administration (SBA) announced that it will release two new questionnaires related to the issue of loan necessity under the Paycheck Protection Program (PPP).
These forms will be sent by PPP lenders only to PPP borrowers who received a principal loan amount of $2 million or more, and borrowers will have ten days to complete it.  
The purpose of the forms is to collect information that will be used by SBA loan reviewers to evaluate the good-faith certification that were made on the loan application that economic uncertainty made the loan request necessary.
The two forms – SBA Form 3509 (for for-profit borrowers) and SBA Form 3510 (for nonprofit borrowers) are not yet available on the SBA’s website, but, have been distributed to certain borrowers and posted on websites such as RINA’s. We cannot confirm these are the final versions of the forms that eventually will be sent to borrowers, but they are the versions currently posted by professional firms online.
The government estimated these forms will apply to approximately 52,000 borrowers: 42,000 for-profit borrowers and 10,000 not-for-profit borrowers.
Several of the questions on the forms request information concerning the borrower’s experience after receiving the loan. This focus implies that there will be heightened scrutiny of borrowers that:

  • Had significant cash on hand when they applied
  • Paid any dividends or other capital distributions (other than for pass-through estimated tax payments) to its owners (from 3/13/20 – the end of the PPP loan forgiveness period)
  • Compensated employees or owners in an amount that exceeds $250,000 on an annualized basis over the forgiveness period
  • Are owned by publicly traded companies
  • Are owned by private equity/hedge funds/venture capital firms

While it is not clear when lenders will send the forms to borrowers, we recommend that borrowers with loans totaling $2 million or more start preparing their responses and collecting supporting documentation given the short turnaround time to respond (10 business days after receipt).
A simplified forgiveness process for PPP loans up to $50k was announced last month when the SBA issued an alternative Loan Forgiveness Application, SBA Form 3508S. That guidance applies to nearly 70% of all PPP loans. Details are available on RINA’s website.
Those borrowers with PPP loans greater than $50,000 but under $2million must use SBA Form 3508, while the SBA Form 3508EZ can be used by the self-employed, independent contractors, and sole proprietors and borrowers who did not reduce employee levels, wages or hours.

If you have questions or would like assistance as you work through the loan forgiveness process, please reach out to the RINA CARES team at

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