Unhappy With Your PPP Forgiveness Outcome? Here’s How to File a PPP Loan Appeal

After submitting Form 3508, Form 3508EZ, Form 3508S, or a lender equivalent, you wait for a verdict. Will your Paycheck Protection Program (PPP) loan be fully, partially, or not at all forgiven? If you’re not happy with the result, you may be able to submit a PPP loan appeal.

Read on to learn who can appeal PPP loan reviews, how to file an appeal, and what to expect throughout the process. 

What you need to know about a PPP loan appeal 

The Small Business Administration (SBA) Office of Hearings and Appeals (OHA) allows PPP loan borrowers to appeal certain SBA loan review decisions. If the SBA decides that you do not qualify for PPP loan forgiveness, you may be able to start the appeal process with the OHA. 

When you apply for loan forgiveness, your lender issues their decision about how much is forgivable to you and the SBA. 

Here’s the thing that’s a little tricky: You can only submit an appeal with the OHA if the SBA has issued a loan review decision. You cannot submit an appeal with the OHA if you’re unhappy with your lender’s decision. 

So, let’s take a step back and go over the two ways you can get to an SBA loan review decision: 

  1. You can request an SBA loan review: If your lender decides that 100% of your PPP loan is not forgivable, they must issue their decision to you and the SBA within five business days, along with an explanation. You can then request that the SBA reviews your lender’s decision, but a review isn’t guaranteed. 
  2. The SBA decides to conduct a loan review of your PPP loan: The SBA automatically reviews all PPP loans of $2 million or more. And, they may select your PPP loan for a loan review, even if your loan is less than $2 million. 

If the SBA conducts an SBA loan review and denies forgiveness, you can appeal the decision to OHA—if you meet certain qualifications. 

Defines what is a ppp loan appeal (lets borrowers fight an SBA loan review result)

1. Who can appeal PPP loan forgiveness results?

You can go through the PPP loan forgiveness appeal process with the OHA if the SBA loan review determines that you:

  • Weren’t eligible for a PPP loan in the first place
  • Weren’t eligible for the PPP loan amount you received 
  • Used the PPP money for unauthorized purposes
  • Aren’t eligible for the PPP loan forgiveness amount your lender determined and/or
  • Aren’t eligible for any forgiveness when the lender issued a full denial decision to the SBA 

Again, you can only appeal SBA loan review results, not lender determinations. If you’re unhappy with your lender’s decision, you must first request an SBA loan review. 

Your SBA loan review includes information about your right to appeal if the decision is appealable. 

2. Is there a deadline for submitting your appeal?

Yes, there is a deadline for submitting your appeal to the OHA. 

You have 30 calendar days after receiving the final SBA loan review decision or a notification of the decision from your lender (whichever is earlier). 

3. How to start the PPP loan appeal process 

For your appeal, you need to gather some documents. Be as thorough as you can be when providing the OHA the records it needs. You may consider hiring a small business lawyer to help you through the appeal process. 

Your appeal petition should include:

  1. The basis for OHA’s jurisdiction and evidence that you’re filing on time
  2. A copy of the SBA loan review decision you’re appealing or a description of the decision
  3. A statement explaining why you think the SBA loan review is incorrect
  4. What you’re hoping to receive (e.g., the forgiveness amount you feel you deserve)
  5. Signed copies of payroll tax filings reported to the IRS, state quarterly employee wage reporting copies, and unemployment insurance tax filings (if you didn’t include them with the forgiveness application) OR an explanation as to why they’re irrelevant or unavailable
  6. Signed copies of federal tax returns and appropriate schedules filed with the IRS showing self-employment or partner income (if you didn’t include it with the PPP application form) OR an explanation as to why they’re irrelevant or unavailable
  7. Your or your lawyer’s name, address, phone number, email address, and signature  

4. Where to send your appeal 

Send your appeal petition, along with your supporting documents and signed certificate of service, to:

Associate General Counsel for Litigation, U.S. Small Business Administration

409 Third Street SW

Washington, DC 20416

Further, the SBA’s email address for appeals is: OLITService@sba.gov

5. Possible appeal outcomes 

So, what can you expect from your PPP loan appeal? The OHA assigns the case to a judge. The judge should issue their decision within 45 calendar days after the OHA receives the appeal. This is known as the “initial decision.” 

Any party can file a request for reconsideration or review of the initial decision. You and the SBA have 10 calendar days after the judge’s initial decision to ask them to reconsider. And, the judge has 20 calendar days to reconsider their initial decision. 

The judge’s initial decision becomes an SBA final decision 30 calendar days after receiving the initial decision. 

The decision either:

  • Affirms the SBA loan review decision
  • Reverses the SBA loan review decision
  • Remands the SBA loan review decision

Realize you used the wrong forgiveness form? Here’s what to do

Did you apply for loan forgiveness using Form 3508 or 3508EZ when you could have used the simplest form, Form 3508S? You might be able to resubmit the loan forgiveness application to your lender using Form 3508S. 

To do so, you must resubmit your application before the SBA:

  1. Gives your lender their final SBA loan decision OR
  2. Remits the PPP loan forgiveness payment to your lender 

Looking for more information?

For more information on PPP loan reviews and the SBA PPP loan forgiveness appeal process, take a look at the following resources:

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