The Small Business Administration is sending out questionnaires to businesses that received Paycheck Protection Program (PPP) loans during the pandemic, demanding new details about their operations to justify the aid and loan forgiveness.

The SBA says the reviews are "to maximize program integrity and protect taxpayer resources” on loans of more than $2 million. The new initiative requires banks to deliver the questionnaire answers back to the agency within 10 days.

The SBA began to circulate the "loan necessity" questionnaires last week  to companies and nonprofits that took forgivable PPP loans.

The new questions for businesses—which borrowers must complete within 10 business days of receiving it—ask for specifics on gross revenues, capital improvement projects, dividend payments and compensation, including whether any employees earned more than $250,000.

The agency said in the document that the information “will be used to inform SBA’s review of your good-faith certification that economic uncertainty made your loan request necessary to support your ongoing operations.”

Failure to complete the form may cause the SBA to determine that a business was ineligible, and the agency may seek repayment “or pursue other available remedies,” the SBA said in the form.

False statements to the questionnaire carry heavy penalties, with punishment topping out at “imprisonment of not than thirty years and/or a fine of not more than $1,000,000,” the form states.

More than five million PPP loans totaling $525 billion in emergency funding for small businesses suffering during the pandemic were approved under the program created by the CARES Act.

Now as firms and their accountants begin to move toward applying for loan forgiveness on the PPP loans, they and the banks that issued the loans are fearful that their answers may jeopardize that expected forgiveness. PPP loan recipients are eligible for forgiveness if they devoted at least 60% of the proceeds to payroll expenses. Firms that fall short of the amount may be eligible for partial forgiveness, according to the CARES Act and SBA rules.

The Trump administration announced plans to review the program in late April, after news broke that publicly traded companies like Shake Shack and Ruth's Hospitality Group were some of the first businesses to receive PPP loans. That news resulted in a public outcry as the first wave of PPP funding ran out.

Congress later approved more money to the program, which had nearly $134 billion left unused when the SBA’s lending authority expired August 8.

Now banks find themselves in the hotseat, responsible for entering businesses' responses to the new questionnaire into the SBA's system, which creates risks of incorrect data entry, untold misunderstandings regarding information supplied by PPP loan borrowers and the potential for denied forgiveness.

The new process "could end up being a real mess for lenders and borrowers alike,” the National Association of Government Guaranteed Lenders (NAGGL) said in a statement. PPP participation “becomes a riskier proposition for the lenders and borrowers with every new policy change."