Here’s What to Do If You Are Denied PPP Loan Forgiveness

ppp loan forgiveness application

If you were denied for all or part of the money on your PPP loan forgiveness application, your appeal must be timely.

You have 30 days to appeal. The clock starts when you receive written notification from the Small Business Administration (SBA).

What to Do If You’re Denied PPP Loan Forgiveness

This is an important element of the 30-day time frame. It’s NOT 30 days from the time your lender received the notification. It’s 30 days from when YOU received the notification.

In other words, if your lender calls you with that news, have the SBA notification letter time stamped with that day’s date when you receive the letter.

Need to Know Facts

If you miss the deadline, the SBA will send your lender paperwork naming the amount of your PPP loan that wasn’t forgiven. You will owe that amount. It will be too late to file an appeal.

Repayment of a PPP loan is deferred pending a final decision by the SBA Office of Hearings and Appeals.

The SBA automatically reviews PPP loans of $2 million or more. Otherwise, the SBA doesn’t review PPP loans unless a review is requested.

How to Appeal

The most common reasons for all or part of a PPP loan to be unforgiven:

  • You weren’t eligible for a PPP loan.
  • You made a mistake with your calculations.
  • You didn’t use the money for the proper purpose.
  • Your documentation wasn’t complete.

To file your appeal, you’ll need to assemble the following information:

  1. A copy of the SBA decision letter, including the date it was received. When the SBA receives your paperwork, this letter will be used to extend your PPP loan deferment period.
  2. Facts and Statements – All the documented arguments that support your case. The needed documentation may include: signed copies of payroll tax filings which were reported to the IRS, state quarterly employee wage reporting copies, unemployment tax filings, signed copies of federal tax returns (with schedules if needed) showing self-employment or partner income. Note that it’s a requirement that specific types of documentation must be signed. Yes, PPP loan forgiveness denial may happen because those documents weren’t signed.
  3. Your information including your name, address, contact phone numbers, email addresses and signature (your signature and/or your attorney).

Mail the packet of information to:

Small Business Administration
Office of Hearings and Appeals
409 Third Street SW
Washington DC 20416


What Happens to Your Appeal?

The Small Business Administration Office of Hearings and Appeals assigns a judge to the case. The OHA judge has 45 days to respond to the appeal and before that deadline must issue a Notice and Order decision.

You’ll be served with that legal notice. If you still don’t agree, you must respond within 10 days after service. If you don’t respond, the OHA judge’s decision becomes final after 30 days.

You have two options after receiving the legal notice:

File a request with the OHA for reconsideration.

Appeal the OHA decision to the applicable Federal District Court. You (or your attorney) will notify:

Small Business Administration
Associate General Counsel for Litigation
409 Third St. SW
Washington DC 20416


Paycheck Protection Loans Repayment Status

The Small Business Administration continues to forgive Paycheck Protection Program loans at a steady clip — with the agency making payments on 6.76 million applications so far.

And while the vast majority of loans are forgiven for all or nearly all of the loan amount, some are still denied forgiveness by the SBA. Out of the $561.5 billion in requested loan forgiveness, the SBA has paid out $542.3 billion, meaning billions of dollars in loans have not been forgiven at this point, according to SBA data as of Sept. 19.

Image: Depositphotos

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Lisa Price Lisa Price is a staff writer for Small Business Trends and has been a member of the team for 4 years. She has a B.A. in English with a minor in journalism from Shippensburg State College (Pennsylvania). She is also a freelance writer and previously worked as a newspaper circulation district manager and radio station commercial writer. In 2019, Lisa received the (Pennsylvania) Keystone Award.