PPP Loan Forgiveness Denied: Can I Appeal?

So your probably wondering if there’s any recourse after receiving that devastating letter saying the SBA denied your PPP loan forgiveness. The frustration is real—you spent months gathering payroll documentation, tracking expenses meticulously, and submitting what you believed was a complete forgiveness application. Then the denial letter arrives. Maybe the SBA says you weren’t eligible for the loan amount you received, or that you used funds for unauthorized purposes, or that your documentation didn’t meet there standards. Whatever the reason, your facing the prospect of repaying the entire loan plus interest when you thought this debt was going away.

The short answer is YES—you absolutely can appeal an SBA denial of your PPP loan forgiveness, but the process comes with strict deadlines and specific requirements that you need to understand immediately. The most critical fact: you have exactly 30 calendar days from the date you receive the SBA’s loan review decision to file your appeal. Not 30 business days. Not 30 days from when you opened the letter. 30 calendar days from receipt, and once that window closes, you lose your right to appeal permanently. We’ve seen borrowers miss this deadline because they were paralyzed by shock, or they spent weeks trying to handle it themselves before realizing they needed legal help, or they simply didn’t understand how fast the clock was ticking. Don’t make that mistake—the 30-day rule is absolute.

What makes PPP loan forgiveness appeals particularly complex is that there are actually two different decision-makers in the forgiveness process—your lender and the SBA—and you can only appeal SBA decisions, not lender decisions. Your lender does the initial review of your forgiveness application and makes a recommendation to the SBA. The SBA then conducts its own review and makes the final decision. If your lender denies your application or recommends partial forgiveness, you can’t directly appeal the lender’s decision to the SBA Office of Hearings and Appeals (OHA). However, you CAN request that the SBA review the lender’s decision, as long as you do so within 30 days, and if the SBA issues an adverse decision after that review, then you can appeal to OHA. It’s confusing, and the procedural maze is one reason why so many borrowers benefit from having experienced legal representation throughout this process.

This article explains everything you need to know about appealing a PPP loan forgiveness denial—what decisions can be appealed, how the appeal process works, what documentation you’ll need, what legal standards apply, how long appeals take, and what your realistic chances are of success. We’ll also address the critical mistakes that cause borrowers to lose their appeals, and when it makes sense to pursue other options like settling the debt through an offer in compromise instead of fighting the denial. If your staring at a denial letter right now, read this entire article carefully, because the decisions you make in the next few days will determine whether you have any chance of getting that loan forgiven or whether you’ll be stuck repaying tens or hundreds of thousands of dollars.

What PPP Forgiveness Decisions Can Be Appealed?

Not every decision related to your PPP loan is appealable to the SBA Office of Hearings and Appeals. According to 13 CFR § 134.1202, you can appeal an SBA decision if the SBA finds that:

• You were not eligible for a PPP loan in the first place
• You were not eligible for the PPP loan amount you received
• You used the PPP loan proceeds for unauthorized uses
• You were not eligible for loan forgiveness in the amount determined by your lender
• You were ineligible for loan forgiveness in any amount (a full denial)

These categories cover most of the reasons borrowers receive denial letters. The eligibility issues typically involve questions about whether your business was operational before February 15, 2020, whether you had disqualifying criminal history, or whether your business fell into an ineligible category. The loan amount issues usually relate to how you calculated payroll costs or whether you inflated employee counts. The unauthorized use findings involve the SBA determining that you spent PPP funds on expenses that don’t qualify—personal expenses, paying yourself beyond allowed amounts, or expenses incurred outside the covered period. And the forgiveness amount disputes typically center on documentation problems—missing payroll reports, insufficient proof of expenses, or discrepancies between what you claimed and what you can prove.

However, there’s a crucial limitation: OHA does NOT have jurisdiction over decisions made solely by your lender. If your lender denies your forgiveness application or recommends only partial forgiveness, and the SBA hasn’t yet issued its own decision, you can’t bypass your lender and go straight to OHA. The regulations require you to first contact your lender directly to dispute there decision. If that doesn’t resolve the issue, you can then request that the SBA review the lender’s decision, but you must do so within 30 days of the lender’s decision. Once the SBA conducts its review and issues a loan review decision, THAT decision becomes appealable to OHA if it’s adverse to you.

This procedural distinction trips up a lot of borrowers. They receive a denial from there lender, immediately file an appeal with OHA, and then discover that OHA dismisses the appeal for lack of jurisdiction because the SBA itself hasn’t issued a reviewable decision yet. The correct sequence is: lender denial → request SBA review of lender’s decision → SBA issues loan review decision → appeal to OHA if SBA decision is adverse. Each step has its own 30-day deadline, so timing is critical throughout the entire process.

How Do I File an Appeal With the SBA Office of Hearings and Appeals?

The appeal process begins at appeals.sba.gov, the electronic filing system for the SBA Office of Hearings and Appeals. This is the ONLY way to file a PPP appeal—you can’t mail a paper appeal, you can’t email it, and you can’t file it with your local SBA office. The entire process is handled electronically through this portal. If you’ve never used the system before, you’ll need to create an account, which requires basic information about you and your business. The system is generally straightforward, but borrowers who aren’t comfortable with technology sometimes struggle with the filing process, which is another reason legal representation helps—experienced attorneys file these appeals routinely and know how to navigate the system efficiently.

Your appeal petition must include several key components. First, you need a copy of the loan review decision that your appealing—the actual SBA letter that denied your forgiveness or found you ineligible. Second, you need a clear statement explaining why you believe the SBA’s decision was erroneous. This isn’t just a general complaint or an expression of frustration—you need to identify the specific factual or legal errors the SBA made. Did they misinterpret the regulations? Did they overlook documentation you submitted? Did they make factual findings that contradict the evidence? Your statement needs to pinpoint these errors with specificity. Third, you need to specify the relief your seeking—typically, approval of loan forgiveness in the full amount you applied for, or partial forgiveness if the SBA denied more than they should have. Fourth, you need to attach supporting documentation—signed copies of your payroll tax filings, bank statements showing how you used PPP funds, payroll registers, 1099 forms for contractors, lease agreements, utility bills, and any other evidence that supports your position.

The legal standard you must meet on appeal is showing that the SBA’s loan review decision was based on “clear error of fact or law.” This is a difficult standard—you can’t win just by showing that reasonable minds could differ or that the evidence could support either conclusion. You have to demonstrate that the SBA got it wrong in a way that’s obvious and unambiguous. For factual errors, this means showing that the SBA made findings that are directly contradicted by documentary evidence. For legal errors, this means showing that the SBA misinterpreted or misapplied the statutes, regulations, or SBA guidance that govern PPP loan forgiveness. The burden is on YOU as the appellant—the SBA’s decision is presumed correct unless you prove it was clearly erroneous.

One procedural requirement that borrowers often overlook: you must also provide your lender with a copy of your timely appeal petition. Why? Because under the PPP rules, your loan repayment obligation is deferred while your forgiveness application is pending. Once the SBA denies forgiveness, the deferment period would normally end and you’d have to start making payments. But if you file a timely appeal, the deferment period extends until OHA issues a final decision. By providing your lender with proof that you filed the appeal, you ensure that they don’t start demanding payments while your appeal is pending. If your lender tries to collect payments during the appeal period after you’ve notified them of the appeal, that’s a violation of the PPP loan terms, and you should contact your attorney immediately.

What Happens After I File My Appeal?

Once you submit your appeal through the appeals.sba.gov portal, OHA will assign your case to an administrative law judge (ALJ). The SBA will then file a response to your appeal—basically there side of the story, explaining why they believe there decision was correct and why your arguments fail. You’ll have an opportunity to file a reply to the SBA’s response, addressing there arguments and reinforcing your position. The entire process is adversarial—your arguing one side, the SBA is arguing the other, and the ALJ will ultimately decide who’s right.

Most PPP appeals are decided based on the written record—the documents you submitted with your forgiveness application, the documents you submit with your appeal, and the legal arguments both sides make in there briefs. However, OHA has discretion to hold a hearing if the judge believes that testimony or oral argument would be helpful. These hearings can be conducted in person, by telephone, or by video conference. If your case involves disputed facts—for example, whether you actually had employees on your payroll, or whether certain expenses were actually incurred for your business—a hearing gives you the chance to testify under oath and present witness testimony to support your version of events. If your case is purely legal—for example, whether the SBA correctly interpreted a regulation—a hearing might not be necessary because the judge can decide the legal issue based on the briefs.

The timeline for PPP appeals varies considerably. Some straightforward cases are decided within a few months, while complex cases involving extensive documentation or disputed facts can take six months to a year or more. OHA experienced a massive influx of PPP-related appeals in 2021 and 2022, which created backlogs, and while the pace has picked up somewhat, these cases still take time to work through the system. During this period, your loan remains in deferment—you don’t have to make payments while the appeal is pending. However, interest continues to accrue on the unforgiven loan balance at 1% annually, so if you ultimately lose the appeal, you’ll owe more than you would have if you’d just started repaying immediately.

The ALJ will eventually issue a written decision. If the judge rules in your favor, the SBA must grant the forgiveness you were entitled to, which means the loan gets discharged and you don’t owe anything (except any portion that wasn’t forgiven if you received partial forgiveness). If the judge rules against you, the SBA’s denial is upheld, and you’ll have to repay the full loan amount with interest. There is one additional level of appeal available: if you lose at the OHA level, you can request reconsideration by the OHA Director, but this is rarely successful unless there was a significant legal error or the ALJ overlooked critical evidence. After that, your only option would be federal court litigation, which is expensive and has limited chances of success on administrative review.

What Are the Most Common Reasons PPP Forgiveness Gets Denied?

Understanding why forgiveness applications get denied helps you assess whether an appeal is likely to succeed in your case. Some denial reasons are based on legitimate problems with the application that are difficult to overcome on appeal, while others involve SBA errors or overly aggressive interpretations of the rules where you have a strong chance of prevailing. Here are the most common denial scenarios we see:

Documentation deficiencies. This is the number one reason for denials. The SBA requires extensive documentation to support your forgiveness request—payroll tax filings (Form 941 for each quarter of the covered period), state quarterly wage reports, payment receipts or cancelled checks showing you actually paid the payroll costs, bank account statements showing the PPP funds were deposited and then used for eligible expenses, and documentation for nonpayroll costs like rent, utilities, and mortgage interest. If your missing any of these documents, or if there are discrepancies between what you claimed and what your documentation shows, the SBA will deny forgiveness for the unsupported amounts. The appeal question becomes: can you now provide documentation you didn’t submit before? If you actually have the missing documents and just failed to include them with your original application, an appeal has a good chance because you can demonstrate that the SBA’s factual finding—that you didn’t prove the expenses—was clearly erroneous. If you don’t have the documentation and never did, the appeal is much harder because you can’t meet your burden of proof.

Owner compensation limits exceeded. The PPP rules capped how much owner compensation could be included in forgivable payroll costs—for owner-employees, the limit was $20,833 for an 8-week covered period or $46,154 for a 24-week covered period (equivalent to $100,000 annually). For self-employed individuals without employees, the limit was calculated differently based on 2019 net profit from Schedule C. Many borrowers—especially self-employed individuals—included more than these limits in there forgiveness calculations, and the SBA denied the excess. These denials are usually correct applications of the rules, which makes appeals difficult unless you can show that the SBA miscalculated the amount or that you actually did have employees who should have been counted separately from your owner compensation.

Ineligible expenses included. Borrowers sometimes include expenses in there forgiveness calculation that don’t qualify under the PPP rules. Common examples: paying contractors (only employee payroll costs and owner compensation count for payroll, not payments to independent contractors), prepaying expenses beyond the covered period, paying owners distribution or draws beyond the compensation limits, or including health insurance premiums that weren’t actually paid during the covered period. If the SBA finds that you included ineligible expenses, they’ll reduce your forgiveness by those amounts. Appeals can succeed if you can show that the expenses actually were eligible under the rules and the SBA misunderstood what you submitted, but if you genuinely included things that don’t qualify, the appeal likely won’t help.

Full-time equivalent employee reduction. The original PPP rules required borrowers to maintain there employee headcount and wages during the covered period compared to a reference period in 2019 or early 2020. If you reduced your FTE count and didn’t qualify for one of the exceptions, your forgiveness amount was supposed to be reduced proportionally. Many borrowers didn’t understand this rule or miscalculated there FTE count, leading to denials or reductions. These cases often involve complex factual disputes about how many employees you actually had, whether certain employees should be counted, and whether you qualify for safe harbor exceptions (like if you couldn’t find qualified employees or if you couldn’t operate at the same level due to COVID restrictions). Appeals can be successful if you can document that your FTE calculation was correct or that you qualified for an exception the SBA didn’t recognize.

Payroll costs not paid or incurred during covered period. To be forgivable, payroll costs must have been paid OR incurred during your covered period (the 8 or 24 weeks after your loan was disbursed). “Incurred” means the work was performed during that period, even if you paid for it slightly after the period ended. The SBA sometimes denies forgiveness for payroll costs that were paid just before or just after the covered period, particularly if the borrower can’t clearly show when the work was performed. If your payroll runs don’t align neatly with your covered period dates, you might have legitimate incurred costs that the SBA didn’t recognize, which could be grounds for a successful appeal if you can demonstrate the timing with documentation.

Business wasn’t operational before February 15, 2020. One of the fundamental PPP eligibility requirements was that your business had to be operational on February 15, 2020. The SBA sometimes denies forgiveness after discovering that the business was formed after that date, or that it wasn’t actually conducting operations yet even if it was legally formed. If you can document that your business really was operational—showing business income, business expenses, an operational website, customer contracts, or other evidence of actual business activity before February 15, 2020—you have a strong basis for appeal. But if you genuinely weren’t operational until later, there’s no legitimate appeal argument because you clearly didn’t meet the eligibility requirement.

What’s My Realistic Chance of Winning an Appeal?

This is the question borrowers most want answered, and unfortunately there’s no simple statistic we can point to because OHA doesn’t publish win/loss rates for PPP appeals. However, based on our experience handling these cases and reviewing OHA decisions that are publicly available, we can offer some observations about what factors make appeals more or less likely to succeed.

Appeals tend to succeed when the borrower can point to clear documentary evidence that the SBA overlooked or misinterpreted. For example, if the SBA denied forgiveness because they said you didn’t submit your Form 941s, but you can show that you actually did submit them (maybe they’re in your lender’s file, or you have proof of submission), that’s a clear factual error that OHA should correct. Similarly, if the SBA applied the wrong calculation formula or misread a regulation, those are clear legal errors that can be corrected on appeal. Cases with straightforward documentation problems—”here’s the document that proves I paid this expense”—have the odds of success.

Appeals tend to fail when the borrower is essentially asking OHA to accept weaker evidence or to interpret ambiguous facts in there favor. Remember, you have the burden of proving clear error—it’s not enough to show that your interpretation of the facts is plausible or reasonable. If the evidence could go either way, the SBA’s interpretation will usually be upheld. We see a lot of unsuccessful appeals where the borrower argues, “I know I spent the money on payroll” but can’t provide documentation that clearly proves it, or where they argue “this expense should count as eligible” but the regulations don’t clearly support that interpretation. These appeals face an uphill battle because the borrower isn’t demonstrating clear error—they’re just showing that they disagree with the SBA’s judgment call.

Appeals involving complex factual disputes or credibility determinations are unpredictable. If your case involves questions like “did this employee actually work for the business?” or “was this expense really for business purposes or personal use?”—situations where the truth depends on evaluating conflicting evidence or assessing witness credibility—the outcome could go either way depending on what evidence you can marshal and how persuasive your presentation is. These cases often benefit from hearings where you can testify and explain the context, rather than being decided solely on written submissions.

One practical consideration: even if your chances of winning the appeal aren’t great, filing an appeal might still make sense if you face a large denial and can’t afford to repay the loan. The appeal extends your deferment period, giving you months or potentially over a year before you have to start making payments. During that time, you might be able to improve your business’s financial situation, negotiate a settlement with the SBA, or explore other options. Yes, interest continues accruing, but the temporary relief from payment obligations can be valuable. However, you shouldn’t file a frivolous appeal with no legitimate basis just to delay repayment—that could be viewed as bad faith and might prejudice you in future dealings with the SBA.

Should I Hire an Attorney for My PPP Forgiveness Appeal?

You’re not legally required to have an attorney represent you in a PPP forgiveness appeal—you can represent yourself if you choose. However, the practical reality is that these appeals involve complex federal regulations, administrative procedures, and legal standards that most borrowers aren’t familiar with. The SBA will be represented by experienced government attorneys who handle these cases regularly. You’ll be going up against professionals who know the rules, know the precedents, and know how to argue there side effectively. Trying to handle this yourself puts you at a significant disadvantage unless you have legal training or substantial experience with administrative appeals.

Attorneys who specialize in SBA matters and PPP issues bring several advantages. First, we know exactly what documentation OHA expects and how to present it most effectively. We’ve handled dozens or hundreds of these appeals and understand what arguments work and what arguments fail. Second, we can identify legal errors or procedural violations that non-lawyers might miss—maybe the SBA didn’t follow proper procedures in reviewing your application, or maybe they misapplied an interim final rule, or maybe there’s applicable guidance that supports your position that you weren’t aware of. Third, we can handle the procedural requirements—the electronic filing system, the briefing schedule, responding to the SBA’s arguments, requesting hearings when appropriate—without you having to figure out the rules yourself. Fourth, we can negotiate with the SBA even during the appeal process—sometimes the government attorneys are willing to discuss settlement possibilities once they see that you have competent representation and a legitimate case.

The cost concern is real—attorney fees for PPP forgiveness appeals typically range from $5,000 to $20,000 or more depending on the complexity of the case, the amount at stake, and how much work is required. For a borrower facing denial of forgiveness on a $150,000 loan, paying $10,000 in attorney fees to have a strong chance of getting $150,000 forgiven makes economic sense. For a borrower facing denial on a $20,000 loan, the cost-benefit calculation is tougher—you might not be able to justify $10,000 in legal fees to fight over $20,000, especially if your case isn’t particularly strong. However, many attorneys (including our firm) offer free initial consultations where we’ll review your denial letter and assess your situation without charge, so you can get an informed opinion about your chances before committing to the expense.

One middle-ground option: limited scope representation, where an attorney provides advice and guidance but you handle some parts of the appeal yourself. For example, the attorney might review your denial letter, identify the strongest arguments, and draft your initial appeal brief, but then you handle filing it and responding to subsequent filings. This “unbundled” approach costs less than full representation but still gives you professional expertise on the most critical parts of the case.

What If I Miss the 30-Day Deadline to Appeal?

This is a harsh reality: if you miss the 30-day deadline to file your appeal, you lose your right to appeal, period. OHA doesn’t have discretion to grant extensions for late appeals except in very narrow circumstances—basically, you have to show that the failure to file on time was due to circumstances beyond your control AND that you filed as soon as those circumstances were resolved. “I was busy” doesn’t count. “I didn’t understand the deadline” doesn’t count. “I was trying to handle it myself and ran out of time” doesn’t count. The only situations where late appeals might be excused are things like: you were hospitalized in a coma during the entire 30-day period and filed immediately upon regaining consciousness, or there was a natural disaster that completely prevented you from accessing the filing system, or the SBA gave you incorrect information about the deadline that you reasonably relied on.

We’ve seen borrowers who received the denial letter, put it aside intending to deal with it later, and then realized six weeks later that they’d missed the deadline. At that point, there’s nothing we can do on the appeal side. The SBA’s decision becomes final and unappealable. However, missing the appeal deadline doesn’t necessarily mean all hope is lost—you still have other options for dealing with the debt:

Negotiate directly with the SBA. Even after the appeal deadline passes, the SBA’s Office of General Counsel sometimes entertains requests to reconsider decisions where there were obvious errors. This isn’t a formal appeal process and they have no obligation to reopen your case, but if you can present compelling evidence that the denial was clearly wrong, it’s worth trying. We’ve had situations where the SBA agreed to reconsider and ultimately granted forgiveness even though the appeal deadline had passed, particularly in cases involving administrative errors on the SBA’s part.

Request an offer in compromise. If you can’t afford to repay the full loan amount, you can propose to settle the debt for less than what you owe. The SBA will consider offers in compromise if you can demonstrate that you’re unable to repay the full amount and that the offer represents the most the government could reasonably collect from you. This requires detailed financial disclosures showing your income, assets, and expenses. The SBA will essentially calculate what they could recover if they pursued you to the full extent—garnishing wages, putting liens on property, seizing assets—and they’ll consider settling for something approaching that amount rather than going through years of collection efforts.

Challenge collection actions. If the SBA takes enforcement actions against you—referring the debt to Treasury for administrative offset or tax refund seizure, garnishing wages, or filing liens—you have rights to challenge those specific actions even though you can’t appeal the underlying forgiveness denial anymore. These collection-related challenges are separate procedural rights, though they don’t address whether the forgiveness denial itself was correct.

The bottom line: don’t miss the 30-day deadline. If your approaching the deadline and haven’t hired an attorney yet, at minimum file a basic appeal yourself to preserve your rights, even if you then get an attorney to take over and file a more comprehensive brief. It’s better to file a bare-bones appeal on day 29 and then strengthen it later than to miss the deadline entirely and lose your appeal rights forever.

Can I Just Ignore the Denial and Hope the SBA Forgets About It?

Absolutely not. Ignoring an SBA forgiveness denial is one of the worst decisions you can make. Some borrowers have this fantasy that if they just don’t respond, maybe the SBA will be too busy to follow up and the debt will go away. That’s not how federal debt works. The SBA WILL pursue collection of the unforgiven loan amount, and they have collection tools that private creditors can only dream about.

Once forgiveness is denied and the appeal period expires (or you lose your appeal), the loan becomes a debt you owe to the federal government. The SBA will initially send you payment demands. If you don’t make payments, the loan goes into default, and the SBA refers the debt to the Treasury Department’s Bureau of the Fiscal Service for collection. At that point, you’re facing:

• Tax refund offset. The government will intercept your federal tax refunds and apply them to the debt. If you normally get a $5,000 tax refund, you’ll get nothing—it’ll all go to your PPP loan debt.
• Administrative wage garnishment. The government can garnish up to 15% of your disposable income from your paycheck without even going to court first. This is an administrative process, not a judicial one, so they don’t need a lawsuit or a judgment—they just send notice to your employer and start taking money.
• Federal benefit offset. If you receive certain federal benefits (though Social Security retirement benefits are usually protected), those can be offset to pay the debt.
• Credit reporting. The defaulted SBA loan will be reported to credit bureaus, destroying your credit score. This affects your ability to buy a house, get a car loan, or even rent an apartment.
• Litigation. The Department of Justice can file a lawsuit against you to obtain a judgment for the debt. Once they have a judgment, they can use state collection remedies—garnishing bank accounts, placing liens on your property, seizing assets.
• Personal guarantee enforcement. PPP loans over $200,000 required a personal guarantee from owners with 20% or more ownership. If your loan was in that category, the SBA can pursue you personally for the debt even if your business closed or filed bankruptcy.

The government doesn’t forget about debts, and federal debts essentially never expire—there’s generally no statute of limitations on collecting federal debts. The SBA can pursue this debt for decades if necessary. We’ve seen borrowers who ignored SBA debts for years, thought they’d gotten away with it, and then suddenly had their bank account levied or their wages garnished when they least expected it.

If you can’t afford to repay the loan, the solution is not to ignore it—the solution is to proactively engage with the SBA about repayment options, hardship accommodations, or settlement possibilities. Borrowers who communicate with the SBA and work toward a resolution generally get better outcomes than borrowers who stick there heads in the sand and hope the problem goes away.

What Other Options Do I Have Besides Appealing?

Appealing the forgiveness denial to OHA is one option, but it’s not the only one. Depending on your situation, these alternatives might make more sense:

Correct and resubmit. If your forgiveness was denied because of documentation deficiencies or correctable errors, ask your lender if you can submit additional documentation or a corrected application. Some lenders will work with borrowers to address SBA concerns before the decision becomes final. This isn’t always possible—it depends on exactly what stage of the process you’re at and whether the SBA has issued a final decision—but it’s worth exploring, especially if you have the missing documentation readily available.

Request SBA reconsideration. As mentioned earlier, even if you don’t file a formal appeal, you can sometimes request that the SBA reconsider its decision if you can present new evidence or show that there was an obvious error. This is an informal process without strict procedural rules, and the SBA has no obligation to grant reconsideration, but it costs nothing to try if you have a compelling reason.

Repay the loan. If the amount is manageable, you might decide it’s not worth the time, expense, and stress of fighting the denial. Calculate what your repayment obligation would be—the unforgiven loan amount at 1% interest over the remaining loan term (typically 5 years)—and see if you can afford it. For smaller loans, paying it back might be more cost-effective than spending money on legal fees for an appeal that isn’t guaranteed to succeed.

Negotiate a settlement. If you can’t afford to repay the full amount, explore settling the debt for less through an offer in compromise. You’ll need to demonstrate financial hardship and provide detailed financial information, but the SBA does accept settlements when that represents the most they can realistically collect. The settlement amount is typically based on your “reasonable collection potential”—what you could pay over a certain period given your income and assets.

Request a hardship accommodation plan. If you want to repay the loan but need more favorable payment terms, the SBA offers hardship accommodation plans for borrowers experiencing financial difficulties. This might include extending the repayment term, temporarily reducing payment amounts, or deferring payments for a period. These accommodations don’t reduce what you owe, but they make the repayment more manageable.

Bankruptcy. In extreme situations where you have overwhelming debt from multiple sources, bankruptcy might be an option. However, federal student loans and SBA disaster loans (including PPP and EIDL) are difficult to discharge in bankruptcy unless you can meet the strict “undue hardship” standard. Most borrowers can’t meet this standard, so bankruptcy usually isn’t a solution for PPP debt specifically, though it might help with your overall financial situation by discharging other debts.

The right strategy depends on your specific circumstances—how much you owe, why forgiveness was denied, what your financial situation is, and what your realistic chances are of prevailing on appeal. A consultation with an experienced SBA attorney can help you evaluate these options and choose the path forward.

What You Need to Do Right Now

If you’ve received a PPP loan forgiveness denial letter from the SBA, time is your enemy. Here’s what you need to do immediately:

Determine your exact deadline. Count 30 calendar days from the date you received the SBA’s decision. Not the date on the letter—the date you received it. For mailed letters, the receipt date is generally presumed to be a few days after the date on the letter unless you can prove otherwise. Mark this deadline on your calendar and set multiple reminders. This date is absolutely critical.

Gather all your documentation. Collect every document related to your PPP loan—the original application, the promissory note, the forgiveness application, all supporting documentation you submitted, correspondence with your lender, bank statements showing use of funds, payroll records, tax filings, everything. You’ll need this documentation to evaluate whether you have a strong appeal case and to prepare your appeal if you decide to proceed.

Get legal advice immediately. Contact an attorney who handles SBA matters and PPP cases. Most firms (including ours) offer free initial consultations for PPP forgiveness appeals. The consultation lets you explain what happened, show the denial letter, and get an informed assessment of whether an appeal makes sense and what your chances are. Don’t wait until day 28 to start looking for an attorney—if you need representation, the attorney will need time to review your case and prepare the appeal.

Don’t communicate with the SBA without guidance. Once you’ve received the denial, be very careful about any additional communications with the SBA. Statements you make could be used against you in the appeal or in any subsequent collection or fraud investigation. If the SBA contacts you, it’s generally to say that you’re consulting with an attorney and will respond through counsel. This isn’t being evasive—it’s protecting your rights.

Notify your lender that you’re appealing. As soon as you file your appeal, send a copy of the appeal petition to your lender. This ensures that they extend your deferment period and don’t start demanding payments while the appeal is pending. Keep proof that you sent this notification—email with a read receipt or certified mail with return receipt.

The worst thing you can do is nothing. Even if you’re overwhelmed, even if you don’t know where to start, even if you’re not sure an appeal makes sense—doing nothing guarantees that you’ll lose your appeal rights and be stuck with the debt. At minimum, make the phone call to an attorney for a consultation so you can make an informed decision about how to proceed. The 30-day deadline doesn’t care about your stress level or confusion—it’s absolute, and once it passes, your options become much more limited.

Talk to a PPP Loan Defense Attorney Today

PPP loan forgiveness denials are devastating, but there not necessarily final. With the right legal strategy and timely action, many borrowers can successfully appeal SBA denials and get the forgiveness they’re entitled to. However, the process is complex, the deadlines are unforgiving, and the stakes are high—potentially tens or hundreds of thousands of dollars.

Our firm has extensive experience handling PPP loan forgiveness appeals at the SBA Office of Hearings and Appeals. We’ve helped borrowers overturn wrongful denials, negotiate settlements when appeals weren’t viable, and protect clients from aggressive SBA collection actions. We understand the PPP regulations inside and out, we know what arguments work with OHA judges, and we know how to present your case most effectively.

If your facing a forgiveness denial, don’t wait. Contact us today for a free consultation. We’ll review your denial letter, assess your situation, explain your options, and give you an honest evaluation of your chances on appeal. There’s no obligation—the consultation is completely free—but it could save you thousands or tens of thousands of dollars by helping you understand your rights and make informed decisions about how to respond.

The 30-day clock is ticking. Call us now before your appeal rights expire.