The loan forgiveness process begins when a PPP borrower files a
EZ forgiveness application
) with its PPP lender. A PPP borrower may file its application after it has used all loan proceeds for which it seeks forgiveness. The best time to file a forgiveness application will reflect a careful consideration of several factors related to maximizing loan forgiveness and ensuring that all required supporting documents are available. PPP lenders must review forgiveness applications in good faith and in accordance with specified procedures and must work with borrowers to resolve any errors or omissions they identify.
A PPP lender has 60 days after receipt of a completed forgiveness application to issue a decision to SBA. A lender may approve an application in full or in part, deny it (in which case the lender must immediately notify the borrower), or deny it pending SBA review. SBA has 90 days after it receives a complete, error-free forgiveness decision to remit any loan forgiveness to the lender. The lender must then notify the borrower of the forgiveness amount, indicating when the borrower’s first payment is due for any loan amount not forgiven. Loan amounts not forgiven must be treated by both borrowers and lenders as a PPP loan.
SBA may decide on its own to review any lender decision to deny a forgiveness application. In addition, a borrower has 30 days to request that its lender ask SBA to conduct such a review, in which case the lender has five days to notify SBA of the borrower’s review request. If SBA declines to conduct such a review, it must notify the lender. If it agrees to conduct such a review, it must notify the lender and the borrower of the outcome.
SBA may, at its discretion, decide to review any PPP loan to determine if a borrower was eligible to apply for a PPP loan, for the loan amount borrowed or for the forgiveness amount sought. SBA will notify the lender of any decision to conduct such a review, after which the lender has five days to both notify the borrower and to submit certain documents to SBA. SBA’s procedural notice does not set a deadline for the conduct of such reviews but does indicate that borrowers will have a right to appeal unfavorable outcomes.