PPP Deferment Extended for Borrowers Who Appeal Forgiveness DecisionsThe Small Business Administration (SBA) recently issued an interim final rule that extends the deferment period for Paycheck Protection Program (PPP) borrowers who appeal final SBA loan review decisions.

Prior to the issuance of this interim final rule, the rule for appeals of final SBA loan review decisions on PPP loans provided that appeals by PPP borrowers of any final SBA loan review decision do not extend the deferment period of the PPP loans. Under the original rule, PPP borrowers must begin making payments of principal and interest on the remaining balance of their PPP loans when the SBA remits the loan forgiveness amount to the PPP lender (or notifies the lender that no loan forgiveness is allowed).

Under the new interim final rule, however, a PPP borrower’s timely appeal of a final SBA loan review decision will extend the deferment period for the PPP loan until the SBA’s Office of Hearings and Appeals (OHA) issues a final decision on the appeal.

The revised SBA OHA rule “will provide that the borrower should notify the lender of the appeal so that the lender can extend the deferment period.” Under the revised SBA OHA rule, an appeal petition “must be filed with OHA within 30 calendar days after the appellant’s receipt of the final SBA loan review decision.”

According to the SBA, “to avoid the potential administrative burden of having to reverse implementation of the final SBA loan review decision, including the refund of borrower payments by the lender and the processing of forgiveness payments by SBA, a timely appeal by a PPP borrower of a final SBA loan review decision should extend the deferment period of the PPP loan.” The SBA “believes that allowing for continued deferment is in the best interest of the borrower.” Indeed, the SBA, servicing lenders, and any borrowers vindicated by a successful appeal will all benefit from the reduced back-end administrative burden that this deferment rule is targeting. Accordingly, the SBA is “conforming the applicable PPP rules to provide that a timely appeal by a PPP borrower of a final SBA loan review decision extends the deferment period of the PPP loan until OHA’s decision becomes final under 13 CFR 134.1211.”

If you have any questions about this noteworthy development or the PPP appeal process before SBA OHA, please feel free to contact Aron Beezley or Nathaniel Greeson.

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Photo of Aron C. Beezley Aron C. Beezley

Aron Beezley is the co-leader of Bradley’s Government Contracts Practice Group. Ranked nationally in Government Contracts Law by Chambers in 2019-2020, named one of the “Top Attorneys Under 40” nationwide in Government Contracts Law by Law360 in 2016-2017, and listed in Washington, D.C.

Aron Beezley is the co-leader of Bradley’s Government Contracts Practice Group. Ranked nationally in Government Contracts Law by Chambers in 2019-2020, named one of the “Top Attorneys Under 40” nationwide in Government Contracts Law by Law360 in 2016-2017, and listed in Washington, D.C. Super Lawyers as a “Rising Star” in Government Contracts Law in 2014-2020, Aron’s vast experience includes representation of government contractors in a variety of industries and in all aspects of the government-contracting process, including negotiation, award, performance and termination.

Photo of Nathaniel J. Greeson Nathaniel J. Greeson

Nathaniel Greeson helps clients solve government contracts challenges. Nathaniel represents clients in a range of government procurement issues, including bid protests, claims, disputes, audits and investigations. He has extensive experience with GAO bid protests, agency-level protests, Court of Federal Claims (COFC) bid protests…

Nathaniel Greeson helps clients solve government contracts challenges. Nathaniel represents clients in a range of government procurement issues, including bid protests, claims, disputes, audits and investigations. He has extensive experience with GAO bid protests, agency-level protests, Court of Federal Claims (COFC) bid protests, and SBA OHA size and NAICS appeals, as well as experience with agency-level requests for equitable adjustments (REA) and claims, and Boards of Contract Appeals claims. View articles by Nathaniel.