SBA PPP Loan Review: Common FAQs

The SBA funded every PPP loan, via selected Lending Partners, and they also may review any PPP loan forgiveness application at any time. Per the SBA’s February 28, 2022 guidance titled SBA’s Paycheck Protection Program Loan Review Processes, “Reviews were [are] conducted on loans with a submitted forgiveness application and were [are] prioritized based on the date received. However, SBA has the authority to review a PPP loan of any size at any time and, when warranted, direct borrowers to repay funds used for unauthorized purposes.”

Per their February 2022 guidance: “Government contractors and SBA federal and contract staff, under the supervision of SBA’s Office of Capital Access, conduct the loan review process. The process implemented in October 2020 consists of • an automated review of all loans at an individual and aggregate level, preliminary manual reviews performed by government contractors to resolve loans identified for follow-up during automated screenings, and manual reviews performed by SBA, as deemed necessary, based on loan dollar amount, random statistical sampling, and loans unresolved after automated and preliminary manual reviews.”

PPP Lending Partners advanced the loan funds guaranteed by the SBA to PPP Borrowers and, for that reason, are technically also requesting PPP Forgiveness via this process. For this reason, the SBA consults directly with Lending Partners regarding Borrowers’ Forgiveness Applications and does not speak directly with individual borrowers. Lendio is contracted with your Lender to assist you throughout this process and to act as an intermediary to provide you with both the SBA correspondence and request for documentation we receive and to provide your response to the SBA in kind.

For a PPP loan of any size, SBA may undertake a review at any time at the SBA’s discretion. There may be a specific reason such as a hold code or a discrepancy in data in some cases, but the SBA reviews a percentage of applications that they receive for the purpose of ensuring that their guidelines are being followed correctly by both borrowers and lenders.

As per this IFR issued by the SBA, the SBA is conducting a review of the following:

“Borrower Eligibility: The Administrator may review whether a borrower is eligible for the PPP loan based on the provisions of the CARES Act, the rules and guidance available at the time of the borrower’s PPP loan application, and the terms of the borrower’s loan application”…

“Loan Amounts and Use of Proceeds: The Administrator may review whether a borrower calculated the loan amount correctly and used loan proceeds for the allowable uses specified in the CARES Act.

Loan Forgiveness Amounts: The Administrator may review whether a borrower is entitled to loan forgiveness in the amount claimed on the borrower’s Loan Forgiveness Application (SBA Form 3508 or lender’s equivalent form).”

The SBA will make a decision regarding your eligibility for loan forgiveness based on the above criteria. Additional information may be requested to inform this decision. The SBA review timeline can vary on a case by case basis so there is no guarantee of when the SBA will finalize the review.

Our team will upload any documentation that you have previously submitted during your loan origination and loan forgiveness application processes to the SBA. Please note that the SBA may require additional documentation that has not previously been submitted for the purpose of this review. We will let you know what documentation is needed to meet the SBA’s requests. Please note that SBA reviews are time sensitive so we advise providing any requested documentation as soon as possible.

After submitting your PPP loan forgiveness application, there are additional steps which must be completed before final approval by the SBA. Firstly, your lender has 60 days to approve and submit your application to the SBA. Once the application arrives to the SBA, there can be multiple possible outcomes. While the majority of applications are approved within 90 days, in some cases, there may be SBA reviews, hold codes, or miscellaneous incidents that delay the finalization of the SBA’s decision. It is not uncommon for this process to take longer than 90 days.

The SBA may decide to deny your PPP loan forgiveness on the basis of not receiving the requested documentation. On the forgiveness application, you have acknowledged the following :  “I understand, acknowledge, and agree that SBA may request additional information for the purposes of evaluating the Borrower’s eligibility for the PPP loan and for loan forgiveness, and that the Borrower’s failure to provide information requested by SBA may result in a determination that the Borrower was ineligible for the PPP loan or a denial of the Borrower’s loan forgiveness application.” 
We recommend that you let us know as soon as possible if you are unable to provide the documentation in time or have questions regarding the specific documentation being requested. In the event that the SBA makes a decision to deny your forgiveness application, you will have the opportunity to appeal this decision by filing a claim with the SBA OHA, as detailed in this guidance issued by the SBA.

We are aware of the prevalence of scams related to the PPP loan program and we understand your concern. If you are worried about the legitimacy of the request, we can provide you with the official SBA correspondences notifying your lender of the requests for documentation. Please let us know if there is any additional information you need to mitigate your concerns.

Lendio is working on behalf of your lender to facilitate the PPP loan forgiveness process. We, Lendio, will be your point of contact for managing your SBA review. Your lender has funded your PPP loan per the SBA’s guidelines and the SBA will be making the final determination on your PPP loan forgiveness. Once the decision is made, the SBA will issue a final decision. If the forgiveness is fully or partially approved, the SBA will remit payment to your lender. If there is a carry forward amount on your loan, you will work directly with your lender to arrange payments.