On August 11, the SBA issued an Interim Final Rule regarding the appeal of SBA loan review decisions made under the Paycheck Protection Program (“PPP”). The Interim Final Rule is immediately effective, and while many lenders are still not accepting PPP loan forgiveness applications, provides PPP Borrowers with some guidance as to what the appeals process will look like if they are denied forgiveness of all or part of their PPP loan.

The Interim Final Rule outlines the process to appeal SBA written loan review decisions that find that a Borrower: (1) was ineligible for a PPP loan; (2) used PPP loan proceeds for unauthorized uses or was ineligible for the PPP loan amount received; (3) is ineligible for PPP loan forgiveness in the amount determined by Borrower’s lender in its full or partial approval decision issued to the SBA; and/or (4) is ineligible for PPP loan forgiveness in the full PPP loan amount received due to the issuance of a full denial by Borrower’s lender in its decision issued to the SBA.

Appeals are directed to the SBA’s Office of Hearings and Appeals (“OHA”).  Appeals to OHA may only be made of final SBA loan review decisions.  Borrowers cannot appeal their lender’s decisions unless and until the SBA has made a final loan review decision (although a Borrower may request an SBA review of lender decisions prior to SBA final loan review decisions). 

Details of the requirements for the appeal petition to be filed with OHA are set forth in the Interim Final Rule.  Appeal petitions must be filed within 30 calendar days after the Borrower’s receipt of the final SBA loan review decision, or notification by Borrower’s lender of the final SBA loan review decision, whichever is earlier. 

For more information on the appeals process, please see the Interim Final Rule.