Saturday, June 25, 2022

PPP borrowers may request review of partly forgiven loans

The Small Business Administration announced early this month it will allow Paycheck Protection Program borrowers to request a loan review by SBA when the lender determines that the borrower is entitled to only partial forgiveness of the PPP loan.

Under a procedural notice issued by SBA, when a lender receives a forgiveness remittance from SBA on a loan where only a portion of the PPP loan was forgiven, the lender must inform the borrower that it has 30 calendar days to seek, through the lender, an SBA loan review of the lender’s partial approval decision. SBA retains discretion to accept or deny the borrower’s request to review the loan. If SBA selects the loan for review, the loan is not deferred and the borrower must continue to make payments on the remaining balance of the loan.

SBA also advised that by Feb. 26, lenders must notify all of their borrowers of loans that previously received a partial forgiveness decision that the borrower has 30 calendar days to seek, through the lender, an SBA loan review of the lender’s partial forgiveness decision.

SBA advised it will be providing lenders with additional guidance through the platform, including step-by-step instructions.