For health centers that received SBA PPP loans of $2 million or more…

Tips for Completing the 3510 Loan Necessity Questionnaire

The Small Business Administration (SBA) is requiring that lenders issue “Loan Necessity Questionnaires” to borrowers that received a Paycheck Protection Program (PPP) loan of $2 million or greater and have applied for forgiveness, in order to solicit supplemental information regarding the necessity of the loan request. There are two versions of the questionnaire, one for for-profit borrowers (SBA Form 3509) and one for non-profits (SBA Form 3510). Health centers should receive the non-profit Form 3510 from their PPP lender. The questionnaires have not been posted to the SBA’s website but you can ACCESS THE 3510 FORM HERE >

Form 3510 must be completed and returned along with the required supporting documentation to the lender within 10 business days. Failure to do so may result in the SBA’s determination of ineligibility and request for repayment of the loan or “other available remedies.”

The questionnaire requires borrowers to provide extensive information and backup documentation regarding receipts, expenses, operations, required closures, liquidity, and more. Health center leaders we’ve been in contact with who are seeking guidance about this form have come up short. They are finding that Form 3510 does not allow the opportunity to provide context surrounding the situation that resulted in their health center’s loan necessity. They are concerned that the lack of context may hinder their loan forgiveness.

Recognizing that the strategic measures health centers are taking to weather this pandemic while also providing communities with access to care should be a key consideration for the SBA in determining loan forgiveness, Capital Link has the following suggestions for health center borrowers related to Form 3510:

  • Keep contemporaneous records: It is unlikely that the SBA will reject a loan forgiveness request based solely on the answers obtained through Form 3510, without at least offering you an opportunity to contest the decision. Make sure you have, and continue to keep, a narrative of your thought process at the time of application and as you allocate expenses toward the PPP loan as a method of documenting the decisions you made and the uncertainties you faced. This written narrative will serve as a record of your thinking and needs as the pandemic evolves, which could be provided if the SBA asks for additional information. The SBA should theoretically take into account what a prudent person would do in your situation—when you were working to keep your doors open and keep staff and patients safe over this extended period of time.
  • Include additional documentation with the form: It may not be feasible, depending on how your bank requires you to submit the form, but it is worth finding out if you can add an attachment that proactively “tells your story” as a way to bring more context to the submission.
  • Consult your bank officer: Since Form 3510 is being issued to borrowers by lenders and not directly by the SBA, it may be beneficial to contact your bank officer to explain how you have used the PPP funds and to request their advice regarding how you might best provide further context about the work you have been doing during the pandemic. While loan forgiveness is ultimately the SBA’s decision, it doesn’t hurt to make sure your bank is aware of your concerns. You are likely a major customer of the bank, and they will want to keep you happy and financially stable if at all possible. They have a direct line to the SBA; the more they know about your situation, the more they may be able to advocate for you, even if that is not their specific role.

Please note that it is quite possible that new guidance may be forthcoming from the SBA or individual banks related to Form 3510. Recently, Capital Link worked with NACHC to provide comments on Form 3510 during the comment period provided by the SBA. You can read the comments here. We will post anything we learn here on our COVID-19 webpage as it becomes available.

Lastly, Capital Link estimates that approximately 375 health centers received loans of $2M+ and will be subject to this request. If you experience challenges with the form and/or are turned down by the SBA for loan forgiveness, please let us know by emailing us This email address is being protected from spambots. You need JavaScript enabled to view it.. We look forward to assisting you in obtaining the loan forgiveness you need and deserve as you continue to battle COVID-19.

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