SBA gives borrowers a break when they appeal their PPP lending decisions


The Small Business Administration is trying to eliminate a bureaucratic nightmare in which borrowers who appeal their Paycheck Protection Program loan cancellation decisions must begin repaying their loans, even if those loans are ultimately canceled.

In its latest Interim Final Rule (IFR), released on June 28, the SBA now states that anyone currently appealing their loan decision to their Hearings and Appeals Office may delay scheduled repayments. This also applies to anyone appealing future PPP loan cancellation decisions. The repayment period begins 10 months after the end of a borrower’s eight or 24 week covered period.

Prior to the decision, borrowers had to start repaying their loan as originally planned, regardless of the status of their loan appeal. In the future, borrowers will no longer need to repay principal and interest on loans until their appeal is resolved, which may prevent them from paying anything if their loan ends up being in full. canceled.

The SBA would like to make it clear in the IFR that this deferral extension only applies to borrowers who file a “timely” appeal of a final SBA loan review decision. What is meant by timely is not clear. The SBA was unable to respond to Inc. request for clarification.

Still, the move should ease the minds of borrowers at a time when millions of business owners are expected to start asking for a rebate. According to a recent report by the Pandemic Response Accountability Committee (PRAC), a group of inspectors general from different federal agencies that tracks relief spending for the government, over 4 million PPP loans, amounting to 394.6 billion dollars, have already been canceled. Since April 2020, the agency has helped grant more than 11.7 million loans, totaling nearly $ 800 billion for more than 8.5 million small businesses.

The postponement is just one notable change in the 29-page IFR, which also unveiled details of the SBA’s new PPP loan remission portal. Beginning August 4, the SBA allows borrowers with PPP loans of $ 150,000 or less – which represent 95% of all such loans issued in 2021 – to request a loan forgiveness directly from the agency. Currently, borrowers can only request a rebate through their lender.

It is important to note that direct remittance is only available to borrowers from the more than 600 banks that have so far opted for the SBA’s PPP remittance portal. The SBA estimates that more than 2.17 million borrowers will be able to access the portal. Almost 5,500 lenders participated in the PPP.

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