SBA Issues New Guidance for PPP Lender Decisions Partially Denying Forgiveness

On January 27, 2022, the United States Small Business Administration (“SBA”) published new guidance regarding lender decisions partially denying forgiveness applications and created a process by which the borrower can request that the SBA review the lender’s decision. 

The Old Rule

This is a significant development because, before this new guidance, a borrower could only request an SBA review of a decision denying loan forgiveness in full.  As a result, borrowers who received lender decisions partially denying forgiveness had no administrative remedies available to contest these decisions because lender decisions are not appealing to the SBA’s Office of Hearing and Appeals (“OHA”). 

The New Rule

The SBA has changed course and is now permitting borrowers to request SBA review of a lender decision partially denying forgiveness in a similar fashion as the process for requesting SBA review of a lender decision denying forgiveness in full. Now, a borrower has the same opportunity to potentially turn a non-appealable lender forgiveness decision into an appealable SBA decision if the SBA agrees to review the lender’s decision. To preserve this possibility, the borrower must request SBA review through its lender within thirty days of receiving the lender’s notice that the lender received a partial loan forgiveness payment from the SBA. If the borrower misses this deadline, they will be precluded from requesting an SBA review of the lender’s decision. It is also essential to understand that the SBA decides, in its sole discretion, whether to review a lender’s decision. 

Borrowers can request an SBA review of lender decisions issued under the old rules.

Importantly, this SBA notice has the effect of resurrecting old forgiveness applications denied in part by lenders. This notice requires lenders to notify, by February 26, 2022, borrowers for which lenders had previously issued forgiveness decisions denying applications in part that they have 30 calendar days from receipt of the notice to request SBA review of those decisions. These borrowers will now have a shot at a remedy that did not exist when they received decisions on their forgiveness applications. 

Borrowers must make payments after requesting SBA Review. 

Although this is all good news for borrowers, it should be noted that requesting an SBA review of a lender decision does not stay the obligation of the borrower to continue to make regular payments on the amount of the loan currently not forgiven. This differs from filing an appeal petition with the SBA OHA, which does stay payments while the appeal is pending.

What can you do?

Suppose you believe your lender wrongfully partially denied your forgiveness application. In that case, you need to act quickly to request an SBA review and preserve the possibility of getting an appealable final SBA decision. If you fail to timely request SBA review, then you will lose the opportunity to contest the lender’s decision through the SBA appeals process.  

Contact Us

If you have questions or concerns regarding requesting SBA loan review or other problems with PPP loan forgiveness, please contact Matthew M. Zapala, Esq., by e-mail ( or phone (518.432.3133) for a no-cost consultation to see how Nolan Heller Kauffman LLP may be able to assist you.

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