WASHINGTON (CBS19 NEWS) — Some companies seeking forgiveness for their Paycheck Protection Program funding will see some changes to the process.
The Small Business Administration recently announced some changes to the process for borrowers who have been denied partial or full forgiveness.
According to a statement, borrowers had few options to seek relief if their lender determined they were not eligible for full PPP loan forgiveness before the new guidelines were issued.
Loan recipients expressed frustration when lenders determined they were ineligible for the forgiveness due, repeatedly, to errors made by the lender when the amount was approved.
Under the new guidelines, the SBA allows borrowers to request agency review, through their lenders, whenever the amount forgiven is less than the approved amount.
The statement said this is in addition to previous guidelines reserving the right to review any PPP loan, regardless of size.
It also states that lenders should not notify borrowers that the SBA has disapproved of full forgiveness when the agency has not yet made such a decision.
Additionally, the lender will now be required to inform borrowers that they have 30 calendar days to request a full review of the lender’s decision in cases where the forgiveness is less than the loan amount.
The statement said lenders must provide borrowers with written reasons why a loan has not been fully forgiven.
Until an appeal is reviewed by the SBA, the borrower must continue to make payments on the outstanding balance.
The SBA also warns borrowers that a review could cause the agency to reduce the forgiveness amount or determine that no portion of the amount should be forgiven.
In such a case, lenders are encouraged to work with borrowers to ensure that the resulting balance is repaid, and if the amount increases, to work with borrowers to obtain a revised forgiveness application to resolve any issues raised. evident by the agency.
All of this means that borrowers can now seek relief when a PPP forgiveness amount was less than the loan amount, but they should only do so if they have good evidence that the lender made a mistake in their loan process. exam.
