PPP Borrowers CAUTION!
Increasingly, the Small Business Administration (“SBA”) is sending Paycheck Protection Program (“PPP”) borrowers FINAL SBA LOAN REVIEW DECISION letters. These letters are similar to SBA requests for additional documents and information, but they are different. Borrowers must file a detailed appeal request within 30 days to appeal these FINAL DECISIONS or they are FINAL and borrowers will be required to repay their PPP loans. It takes time to prepare an appeal, which means it’s important to act as soon as you receive a letter that looks like this:
Why is it important to act immediately?
- Because it is a final administrative decision and subject to appeal.
- Because the borrower only has 30 calendar days to file an appeal, which is a very detailed petition, or he will lose his right to challenge the SBA’s decision.
- And because this deadline cannot be extended, even by a judge.
What should borrowers do upon receipt of this SBA letter?
Contact a lawyer immediately.
- Borrowers have only 30 calendar days from the date they receive notice from the SBA to file an appeal. These petitions take time to prepare. They must include all the grounds on which the SBA’s decision is alleged to be wrong, citations of facts and legal authorities, and must be supported by documentation.
- The 30-day deadline for filing an appeal cannot be extended, even by an administrative judge.
Although a borrower can ask his bank to contact the SBA to reconsider his decision, the appeal period is not suspended or extended.
- Don’t wait to contact an attorney to hear from the SBA. At that time, it may be too late to prepare the necessary documents for the appeal.
- In addition, the SBA’s final decision terminates all reviews conducted by the SBA. He closes the SBA file, except for an appeal. So while there may be nothing to lose by asking the SBA to reconsider, it is likely that the SBA will take no further action.
- We are aware of one instance in which the SBA advised a customer that their request for loan forgiveness was being reviewed by the SBA’s “Higher Authority Team” after the borrower had informed of the SBA’s “final decision” denying loan forgiveness. Upon our request, the SBA clarified that its further review of the loan overruled its notice of final decision and therefore there was no time limit for appeal. Absent something in writing from the SBA notifying a borrower that the final decision has been rescinded or rescinded, the borrower’s 30-day period to perfect an appeal remains intact.
Federal law governing appeals against final decisions of the SBA
The SBA letters inform borrowers that, “Pursuant to 13 CFR § 134.1201(b), the borrower has the right to appeal to SBA’s Office of Hearings and Appeals (“OHA”) a final SBA loan review decision. . .”
- This review is not bolded or highlighted. Some borrowers overlook it or don’t appreciate its importance.
- Some borrowers do not file an appeal in a timely manner because they have not read or understood that this letter is a “final decision” of which an appeal is the only recourse to challenge the SBA’s decision.
The SBA’s federal regulations setting out the requirements for an appeal petition state:
(a) Content. The appeal request must contain the following information:
(1) A copy of the final SBA loan review decision being appealed and the date it was received by the borrower. A Paycheck Protection Program discount payment notice does not give the borrower the right to appeal to the OHA.
(2) A complete and accurate statement explaining why the final SBA loan review decision is alleged to be in error, along with all factual information and legal arguments in support of the allegations. There is no required format for an appeal request.
However, the appeal request must meet the following requirements:
(i) The maximum length of an appeal request (excluding attachments) is 20 pages. A table of authorities is only required for requests citing more than 20 decisions, regulations or statutes.
(ii) Clearly label all exhibits and attachments.
(3) The name, address, telephone number, e-mail address and signature of the appellant or his lawyer.
Sub-paragraph (b) states that “A request for appeal which does not contain all the information required by paragraph (a) of this article may be dismissed, with or without prejudice, on the initiative of the judge or on the request of the SBA.”
13 CFR § 134.1204.
13 CFR § 134.1205 requires that the judge dismiss an appeal if it is “untimely”.
And, there is NO EXTENSION of TIME to file the appeal. Borrowers have 30 calendar days from the date they receive the SBA letter. So don’t delay.