How to Appeal an SBA PPP Loan Forgiveness Denial

The U.S. Small Business Administration (SBA) is currently going through loan forgiveness applications to approve or deny claims. Businesses that filed for a PPP loan during the COVID-19 pandemic and used the funds correctly can apply for loan forgiveness.

According to SBA, the loan is eligible for forgiveness if, “during the 8- to 24-week covered period following loan disbursement:

• Employee and compensation levels are maintained,
• The loan proceeds are spent on payroll costs and other eligible expenses, and
• At least 60% of the proceeds are spent on payroll costs.”

Many businesses, however, who used the funds correctly, may receive a letter of denial from SBA. Continue reading to learn more about what to do if SBA denies your forgiveness claim.

WHAT TO DO IF YOU RECEIVE A LETTER OF DENIAL

If you received a letter from the SBA denying your PPP loan forgiveness request within the last 30 days, the clock is ticking. You have 30 days to respond and file your appeal. The timeline for SBA forgiveness appeals isn’t flexible. Once your initial 30-day period expires, you will lose your right to appeal SBA’s denial to forgive your PPP loan.

Steps to Appeal

Watch our full video to learn more tips about how to appeal an SBA PPP loan denial.

The following steps are not a complete guide; rather, a summary of action items.

1. Review “Final SBA Loan Review Decision Letter”
2. Confirm your deadline to appeal the SBA decision
3. Gather your documents and facts to identify issues to raise in your appeal
4. Review SBA’s prior legal decisions and rulings
5. Draft your appeal (max 20 pages) and include exhibits (your evidence) and SBA’s Final Loan Review Decision Letter
6. *You must include your legal arguments, facts, and legal authority to support your position to show SBA’s denial was “clearly erroneous” (there are additional requirements – see SBA’s website)
7. Create an online account at appeals.sba.gov
8. Answer all questions truthfully and completely when responding to SBA’s online questionnaire
9. Identify a legal representative for your business to handle the SBA appeal
10. Upload your appeal, exhibits, and SBA Final Decision Letter

We strongly recommend obtaining an attorney to represent your company, prepare, and file your formal appeal. Note that a CPA is not authorized to represent your business during the appeals process.

The ONLY individuals who can represent your company in the appeals process are: 

• An owner
• A company officer
• An attorney

For more information on what to do if your PPP loan is not forgiven, read our article here.