Under the Interim Final Rule recently issued by the SBA, PPP borrowers who receive an unfavorable decision from the SBA on their loan forgiveness application can now defer payments of principal and interest even longer.
Under the previous rule, borrowers were required to start making payments as soon as the SBA notified the lender that no forgiveness was permitted, or, in the case of a partial forgiveness, when the SBA made a partial payment to the lender. Under the new rule, a borrower’s timely appeal against the SBA’s final decision on loan review extends the grace period until the SBA makes a final decision on the appeal.
This is positive news for borrowers of PPP loans who have received an unfavorable decision from the SBA and wish to appeal the decision to review the loan. The appeal process can be complex. But that might make sense too.
The borrower must file an appeal within 30 calendar days after receiving the SBA’s decision to review the loan.
According to the SBA, as of August 15, 2021, 48% of PPP loans had been submitted for loan forgiveness and that 46% of PPP loans were fully or partially written off.