PPP Loan: You have a new process for appealing a lender’s decision to forgive less than the full amount.
You can now ask your Lender to request an SBA review of your loan forgiveness application. If the SBA selects your loan for review, it will notify your Lender. Even in that case, you must continue to make payments on the remaining balance of the loan. Once the SBA completes its review, it may decide that:
1. None of your loan is forgivable: for instance if they determined that you’re ineligible for the PPP loan. In that case, you must reimburse all the loan.
2. Your loan is forgivable for an amount less than the one your Lender said is forgivable: the SBA will issue a final loan review decision to your Lender. Within five business days, your Lender must provide you with a copy of the Payment Notice and, if applicable, the final SBA loan review decision. Your Lender must then remit the excess amount of the loan previously forgiven to the SBA and re- amortize the PPP loan to adjust for the difference.
3. Your loan is forgivable for an amount greater than what your Lender decided: the SBA will remit an additional forgiveness payment to your Lender to make up for the difference and re- amortize the PPP loan to adjust for the difference.
4. Your loan is forgivable for the same amount as the one that your Lender approved: the SBA will issue a payment notice to your Lender that the forgiveness amount has been upheld. The Lender must provide copy of this notice to you within five business days.
Your request for an SBA review can be made in several situations of disagreement:
- Your Lender issued a partial approval decision to SBA on your borrower’s loan forgiveness application,
- Your Lender required that you apply for forgiveness in an amount less than the full amount of your PPP loan.
During the COVID-19 pandemic, Congress designed the PPP loan to help businesses keep their workforce employed. In 2020 and 2021, small businesses and other eligible entities received $790 billion PPP loan. As of February 20th, 2022, loan forgiveness applications were submitted for $703 billion.
The Small Business Administration (SBA) may review any PPP loan of any size at any time in its discretion. The SBA approved nearly $696 billion of PPP loan forgiveness application.