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.

As community health centers across the country navigate how to best serve their communities as well as adapt and maintain operations during this devastating pandemic, they are facing unprecedented financial challenges. Capital Link has been listening and responding to health center’s concerns. This article contains some of the suggestions and insight we’ve been sharing to support health centers’ efforts to balance financial and operational sustainability with patient and staff care.

With the election now behind us, health centers have ongoing concerns regarding future policy, value-based care, 340B, telehealth, patient engagement, public expectations, and staff and community safety. For the foreseeable future, there is a significant number of unknowns.

Although the road we are on at times seems daunting, there are many useful resources available to assist health centers in finding the best funding sources for their organizations. Similar to a natural disaster, COVID-19 presents opportunities for action and ways of supporting our communities and one another. In order to move forward, keeping each health center’s individual needs in mind, organizations should plan for different scenarios, changing business models, and capital needs in the midst of the continued uncertainty of this crisis.

Health centers should evaluate: What is the obvious need? What do our patients and communities require? What information or resources are available? Maintaining resources, relationships, and reserves allows one to manage through the crisis and often come out stronger. It’s critical that health centers evaluate multiple possible scenarios and maintain awareness of your organization’s capacity—including strategic agility, emergency preparedness, and the availability of relevant data for decision-making.

Developing Your Priorities and Requirements for the Short and Long Terms

There are currently many lenders offering flexible terms for loans and repayment, which health centers may want to consider in order to assure adequate access to cash in an uncertain operating environment. Begin analyzing your needs by conducting a cash flow analysis, asking, “How long can we operate in our current position?” Determine the best and worst case scenarios—start small with what you know, and add on as appropriate. Use ranges rather than specific numbers and examine your environment—what might recover, and what might not?

Capital Renovations to Ensure Safety and Meet Staff and Patient Needs and Expectations

Consider how you might incorporate what you have learned during the pandemic into your center’s physical space and operational processes. What have you learned so far? What do you know now that you didn’t before? What do your patients and staff want and need in terms of your physical and/or virtual footprint? What has worked well, and what not so well? What creativity has expressed itself in the form of more efficient processes? How can you make these changes permanent? What spaces or equipment were you lacking that you wish you had? Did you work with new partners and did that change your space requirements? Which impromptu changes in your physical space do you want to make permanent?

Capital planning remains an important part of your strategic plan. This doesn’t always mean a new facility but rather using your current space more effectively: phasing, renovations, and having a “Plan A” and “Plan B” ready for when capital dollars make themselves available. For example, many centers are considering renovations to existing facilities to accommodate increased use of telehealth, reduce infection risk in common areas and dental suites, and adding negative-pressure rooms to care for contagious patients more safely.

Though we can’t predict the future, we can at least help shape it by sharing our experiences and resources with one another and provide ongoing support, collaboration and guidance. By combining our knowledge of what has worked in the past with what we have learned today, we can help provide a more promising tomorrow.

Keep an eye out for our new learning collaboratives beginning in early 2021, with official dates and application information to be announced soon. All three collaboratives are offered free of charge with support from the Health Resources and Services Administration.

Sustaining and Increasing Access to Care in Rural Communities Learning Collaborative – Offered in collaboration with NACHC, through a series of four interactive webinars between February and April 2021, this Learning Collaborative will explore community needs, growth planning, and financing options for health centers serving rural communities. It will address challenges and opportunities facing FQHCs in communities experiencing hospital distress and closure; examine the impact of telehealth on care delivery; and address financial capacity, sustainability, facility planning and financing options for FQHCs seeking to expand their impact in rural America.

Planning and Financing a Capital Project to Accommodate Integrated Care Learning Collaborative - Capital Link is launching a fourth year of this collaborative, which provides practical direction and tools for capital project planning, financing, and completing for health centers that anticipate the need for a project in the next one-to-five years. This year we will also be highlighting key planning considerations related to the Patient-Centered Medical Home model of team-based, integrated care. Through a series of six monthly interactive learning sessions conducted between February and May 2021, this learning collaborative provides health center participants with guidance to successfully navigate the process of building or renovating facilities that will better serve their communities.

HRSA Loan Guarantee Program (LGP) Learning Collaborative –  Through a series of four interactive learning sessions, the second offering of our newly developed LGP learning collaborative will provide health center participants with guidance and tips on all key elements and requirements for submitting a HRSA Loan Guarantee Program application. The application review, approval, and loan closing process will be also be addressed. Resources developed by HRSA and by Capital Link will be provided throughout the collaborative. 

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