SBA details process to appeal partial PPP loan forgiveness decisions

By Jeff Drew

Paycheck Protection Program (PPP) borrowers that received only partial loan forgiveness from their lenders have a new process for appealing the lender's decision to the U.S. Small Business Administration (SBA).

In a procedural notice published Jan. 27, the SBA said the new appeals process was created after the agency received inquiries by borrowers that received partial forgiveness of their PPP loans because (1) their lender issued a partial approval decision to the SBA on the borrower's loan forgiveness application, or (2) their lender required the borrower to apply for forgiveness in an amount less than the full amount of the PPP loan.

Borrowers can now request, through their lender, an SBA review of their loan if they received a partial forgiveness decision from the lender they do not agree with or if they were required by their lender to apply for forgiveness in less than the full amount of the PPP loan.

The new process does not apply if the borrower applied for less than full forgiveness on their own volition.

Under the new SBA guidance, lenders informing borrowers of SBA approval of a partial loan forgiveness must notify the borrowers that they have 30 calendar days from receipt of the notification to submit their request through the lender for the SBA to review the loan. For borrowers who previously received partial forgiveness approval from the lender, or whose lender required a PPP forgiveness application that was less than the full amount of the PPP loan, lenders have 30 calendar days from receipt of the SBA's procedural notice to notify borrowers of their right to receive an SBA review. Borrowers will then have 30 days from the receipt of the lender notification to submit their request through the lender for the SBA loan review.

Even if the SBA selects the loan for review, the borrower must continue to make payments on the remaining balance of the loan, as the loan is not deferred. The lender will be required to refund those payments if the SBA rules that the loan should have received full forgiveness.

If the SBA's review determines the borrower is entitled to forgiveness in an amount greater than the lender's partial approval decision and the SBA has previously remitted a partial forgiveness payment to the lender, the SBA will remit an additional forgiveness payment to the lender to make up the difference and re-amortize the PPP loan to adjust for the difference.

If the SBA loan review agrees with the forgiveness amount approved by the lender, the SBA will issue a payment notice to the lender that the forgiveness amount has been upheld. Within five business days the lender must provide this notice to the borrower.

If the SBA loan review results in a lesser forgiveness amount, the SBA will issue a final loan review decision to the lender, which must then provide a copy of the Payment Notice and, if applicable, the final SBA loan review decision, to the borrower within five business days. The 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.

In 2020 and 2021, the PPP provided more than 11.4 million forgivable loans totaling $790 billion to small businesses and other eligible entities hurt by the economic impacts of the COVID-19 pandemic. As of Jan. 23, the SBA said it had received more than 9.5 million applications seeking forgiveness for nearly $690 billion in PPP loans. The agency reported making 9.45 million loan forgiveness payments totaling nearly $680 billion.

AICPA experts discuss the latest on the PPP and other small business aid programs during a virtual town hall held every other week. The webcasts, which provide CPE credit, are free to AICPA members and $39 for nonmembers. Go to the AICPA Town Hall Series webpage for more information and to register. Recordings of Town Hall events are available to view for free on AICPA TV.

The AICPA's Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.

For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA's coronavirus resources page or subscribe to our email alerts for breaking PPP news.

— To comment on this article or to suggest an idea for another article, contact Jeff Drew at

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