Under an Interim Final Rule issued recently by the SBA, PPP loan borrowers receiving an adverse decision from the SBA in respect of the borrower’s loan forgiveness application, can now defer making payments of principal and interest even longer.
Under the previous rule, borrowers were required to begin making payments as soon as the SBA notified the lender that forgiveness was not allowed or in the case of partial forgiveness, when the SBA remitted partial payment to the lender. Under the new rule, a borrower’s timely appeal of a final SBA loan review decision will extend the deferment period until the SBA issues a final decision on appeal.
This is welcomed news for PPP loan borrowers who receive an adverse decision from the SBA and want to appeal the loan review decision. The appeals process can be complicated. But, can also be worthwhile.
An appeal petition must be filed by the borrower within 30 calendar days after receiving the SBA loan review decision.
The SBA reports that as of August 15, 2021, loan forgiveness applications have been submitted on 48% of the PPP loans and that 46% of the PPP loans have been fully or partially forgiven.
