Dealing With Some of the Bitter Details of PPP Loans

When the Paycheck Protection Program (PPP) was first announced, many saw it as the answer to their COVID-19 related business issues. There was a rush to get applications in, especially when it was revealed that these loans may not have to be paid back if certain requirements were met. Now, as the dust begins to settle, we are getting a better idea about who makes these decisions.

The Small Business Administration (SBA) has a great deal of discretion over how a PPP loan will be paid back. They decide if the loan can be forgiven or how much will be paid back. In addition, there is currently little guidance on how to appeal their written final decisions. The only SBA decisions that can be appealed are if the borrower was determined ineligible for a PPP loan, for the loan amount received, if the loan amount was used for ineligible purposes, or if the borrower was ineligible for full or partial loan forgiveness. This process is handled by a special SBA office.

They will not review lender decisions unless the borrower makes a request, but the SBA still has the ability to decline. This must be done within 30 days. Filing for an appeal or review does not extend any deferment period, payments must be made. Only the entity that borrowed the funds can appeal, not the lender or any individuals. For more guidance on how this may impact you and your small business, you should take some time to speak to a Qualified Tax Professional.

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