Among the life rafts the Small Business Administration (SBA) threw over the course of the Covid-19 pandemic was the Paycheck Protection Plan Loan geared to helping businesses keep their workforce employed throughout the public health crisis. Now, some businesses are still struggling and some are getting back on their feet after the tumultuous ups and downs of the past year or so. Many businesses have applied for PPP loan forgiveness as they continue to fight for the well-being of their business and its employees. Some applications for PPP loan forgiveness have been denied. While not all PPP loans will be forgiven, you may still have the opportunity to appeal denial of your PPP loan forgiveness and it can be well worth the effort.
How to Appeal a Denial of Your PPP Loan Forgiveness
To apply for PPP loan forgiveness, you submit an application through the lender and the lender will make an initial decision on your application. If your application is denied, the decision will be issued to the SBA and the applicant within 5 business days. In the alternative, your lender may submit your application directly to the SBA and the SBA will render a decision on the application within 90 days. Should your loan forgiveness application be denied in whole or in part, then you may be able to file an appeal.
A denial of PPP loan forgiveness, however, can only be appealed under certain circumstances. For instance, if the SBA determines that you were never eligible for a PPP loan to begin with or you were not eligible for the PPP loan amount that you received, you may be able to file an appeal. Alternatively, if the SBA bases the denial on the assertion that you did not use the PPP for authorized expenses or your lender issued a denial in full stating that you were not eligible for PPP loan forgiveness, you may be able to file an appeal.
The Office of Hearings and Appeals, an independent office of the SBA is tasked with reviewing PPP loan forgiveness application appeals. To appeal a denial of your application, you must file an appeal within 30 days of receiving the SBA determination or notification from your lender, whatever happens first. In order to appeal, you will need to gather a significant amount of documentation. Your appeal should include:
- A description of the SBA loan decision that you are appealing
- An explanation as to why you believe the SBA rendered this decision in error
- A statement as to what you believe you should have been granted by your application
- Signed copies of payroll tax filings reported to the IRS, unemployment insurance tax filings, and state quarterly employee wage reporting copies (alternately, you can provide an explanation as to why you cannot produce these documents)
- Signed copies of federal tax returns to show self-employment or partner income (or an explanation as to why you cannot produce these documents)
- Your name and that of your attorney as well as your address, phone number, email address and signature