Free Consultation: 858.450.1040 Payment | Client Login

MENUMENU
  • EDD
  • IRS
    • IRS Notices – What They Mean
  • About Us
    • MEET THE TEAM
    • PRACTICE AREAS
    • CONTACT US
  • TAX LAW & EDD RESOURCES
    • SMALL BUSINESS OWNERS TAX LAW GUIDE
    • EDD & IRS AUDITS
    • CRIMINAL TAX
    • SAN DIEGO TAX ATTORNEY
    • Orange County Tax Attorney Services
    • TAX BALANCE
    • INNOCENT SPOUSE RELIEF
    • OTHER TAX LAW MATTERS
    • SALES TAX AUDITS
    • UNFILED TAX RETURNS
    • OFFERS IN COMPROMISE
    • CALIFORNIA INCOME TAXES
    • INTERNATIONAL TAX
    • TAX COLLECTIONS
    • CORPORATE | BUSINESS TAX
    • PAYROLL TAX AUDITS
    • TAX LEIN
    • FAQs
  • SBA Loan Resources
    • PPP FORGIVENESS DENIAL APPEAL
    • SBA Criminal Defense
    • FAQs
  • RESOURCES
    • Blog
    • VIDEO LIBRARY
Home > News > SBA Loan Forgiveness Denial Appeal Process

SBA Loan Forgiveness Denial Appeal Process

April 3, 2022

During the COVID-19 pandemic, the Small Business Administration (SBA) doled out Payment Protection Program (PPP) loans to qualified businesses. Over the course of the program, SBA granted over $809 billion in loans.

SBA is currently processing loan forgiveness and loan denials. Businesses that meet SBA PPP loan forgiveness terms are eligible for forgiveness of their PPP loans. 

SBA PPP Loan forgiveness is only eligible for businesses if they used the loan accordingly:

  • “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.”

However, if a business fails to meet the forgiveness criteria, they are responsible for payment in full of the total loan amount. 

If your business applies for PPP loan forgiveness and it is denied, you have 30 days to appeal the denial. This deadline is unwavering, and appeals submitted after 30 days are not eligible, and your business will be responsible for paying back the loan amount in full.  

The agency is also selective on who can defend your business during an appeals process. The only people who can represent your business are:

  • An attorney 
  • The owner 
  • A company officer 

* A CPA cannot defend you nor can they appeal your forgiveness denial. 

What are the Different Types of Appeals?

The Office of Hearings and Appeals (OHA) has jurisdiction over SBA PPP loans. When they deny a loan forgiveness application, it’s due to the following: 

  1. The business is not eligible for the PPP loan
  2. The business is not eligible for the PPP loan amount received;
  3. The business used the loan proceeds for unauthorized expenses;
  4. The business is not eligible  for the PPP loan forgiveness amount determined by the lender in its full or partial approval decision issued to SBA; or
  5. The business is not eligible for PPP loan forgiveness when the lender has issued a full denial decision to SBA.

Loan Forgiveness Denial Appeal Process

If your business receives an SBA PPP Loan denial decision letter, act quickly.

The following steps are a guide for what to do if your business receives a letter of denial.

  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. We strongly recommend retaining a trusted attorney to represent your company because they will prepare, file, and defend your formal appeal.
  5. Review SBA’s prior legal decisions & rulings
  6. Draft your Appeal (max 20 pages) and include exhibits (your evidence) and SBA’s Final Loan Review Decision Letter
  • 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)
  • The appeal must also include a copy of the SBA loan review decision being appealed, a statement as to why the denial is erroneous, and the contact information of the business and/or the business’s attorney.
  1. Create an online account at appeals.sba.gov
  2. Answer all questions truthfully and completely when responding to SBA’s online questionnaire.
  3. Identify a legal representative for your business to handle the SBA Appeal.
  4. Upload your appeal, exhibits, and SBA Final Decision Letter. 
  5. Wait for the final decision.

For more resources on how to appeal an SBA PPP forgiveness denial, read our article, here. Keep in mind that partnering with an attorney, like our team here at Milikowsky Tax Law, can help save your business from potential mistakes.

 

 If SBA sends a Final SBA Loan Review Decision Letter, you have 30 days to submit an appeal. Partner with an attorney to help defend your business.

Filed Under: Blog, News, PPP Loans Tagged With: Appeal Process, Denial process, Loan denial, loan forgiveness, ppp loan, SBA, SBA Loan Forgiveness

Archives

Search

Categories

Questions About
Tax Audit/Controversies?

A representative will be in contact within 1 business day
PRIVACY POLICY

Get Monthly Updates on Important Tax Law Matters



Milikowsky Tax Law is located at: 4250 Executive Square, Ste. 650, La Jolla, CA 92037
o. (858) 450-1040 | m. (858) 212-0542 |
Privacy Policy

DISCLAIMER:
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.

Milikowsky Tax Law © All Rights Reserved. Clear1099.com | Cal1099.com | California1099.com © All Rights Reserved.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT