SBA gives a break for borrowers who appeal their PPP loan decisions

0
55

[ad_1]

Small business administrations are trying to get rid of the bureaucratic nightmare in which borrowers appeal to their Payroll protection program Loan forgiveness decisions need to start paying back their loans – even if those loans are eventually forgiven.

In its last temporary final rule (IFR), released on June 28, the SBA now advises that anyone currently appealing their loan decision to its Hearings and Appeals Office can postpone scheduled payments. This also applies to anyone who appeals a decision to forgive a PPP loan in the future. The maturity begins 10 months after the end of the borrower’s eight- or 24-week coverage period.

Before the order was issued, borrowers were expected to begin making payments on the loan in accordance with the original schedule, regardless of the status of their loan appeal. Going forward, borrowers will no longer have to pay principal and interest on loans until their appeal is heard, which could prevent borrowers from paying anything at all if their loan is fully forgiven.

The SBA points out to the IFR that this extension of the deferral applies only to borrowers who file a “timely” appeal against the SBA’s final decision to renegotiate a loan. It is not clear what is meant by timely. The SBA was unable to respond to Inc. request for clarification.

However, this decision should ease the minds of borrowers at a time when millions of business owners are expected to start asking for forgiveness. According to a recent report Pandemic Response Accountability Committee (PRAC)A team of inspectors general from various federal agencies that track government spending on aid have already written off more than 4 million PPP loans worth $ 394.6 billion. Since April 2020, the agency has helped secure 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 reveals details about the new PPP Loan Forgiveness Portal… Beginning August 4, the SBA will allow borrowers with PPP loans of $ 150,000 or less – representing 95 percent of all such loans disbursed in 2021 – to apply for loan forgiveness directly to the agency. Currently, borrowers can only apply for forgiveness through their lender.

It is important to note that direct forgiveness is only available to borrowers in excess of 600 banks who have chosen so far SBA PPP Forgiveness Portal… The SBA estimates that over 2.17 million borrowers will be able to access the portal. About 5,500 lenders took part in the PPP.

[ad_2]

Source link