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What Can I Do If I Receive a Denial of a PPP Loan Application?

If your lender denied a PPP loan application you have rights to review and appeal. Our experienced SBA attorneys can guide you through the process.

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What Can I Do If I Receive a Denial of a PPP Loan Application?

If the Small Business Administration (SBA) denied your Payment Protection Program (PPP) loan application, you have the right to file an appeal with the SBA Office of Hearings and Appeals (OHA).  Read on to learn more about your appeal rights upon the denial of a PPP loan application.

SBA PPP Loan Denied

The SBA Denied Your PPP Loan  Application

You will have filed your application for your PPP loan.  Unfortunately, the lender denied your application. Importantly, the denial may mean the end of your business. It may result in the termination of employees.  As such, the denial of your PPP loan application can have devastating consequences.  Nevertheless, you can appeal the decision.  However, you must jump through some hoops in order to successfully appeal and denied PPP loan application.

The SBA Review

You can only have a decision by the SBA appealed to an administrative law judge.  Unfortunately, you cannot appeal the decision of the lender to an administrative law judge first.  Therefore, you will have to request a review of the decision first by the SBA.  If the SBA, after its review, also denies your application, you can then appeal that decision to the SBA Office of Hearings and Appeals.   You must request a review within 30 days.

Who Reviews the Denial of a PPP Loan Decision?

If your review is unsuccessful, you file your appeal with the SBA's Office of Hearings and Appeals or OHA.  Thereafter, the administrative law judge (ALJ) receives the case.  In short, an ALJ presides over administrative hearings with the government.  Keep in mind, the SBA will appoint an attorney to represent its interests in the appeal as well.  As such, you should also have an experienced attorney representing your interests.

What is the Timeline to File Your Appeal?

Once the SBA issues its review decision, you have limited time to file your appeal.  To that end, you must file your appeal within 30 calendar days after your receipt of the final SBA loan review decision.  Alternatively, you only have 30 days from your notification by the lender of the final SBA loan review decision.  However, the deadline starts running from whichever notification you receive first.

What Is Your Burden of Proof?

In order to successfully appeal, you must prove that the SBA based its loan review decision on clear error of fact or law.  Furthermore, the burden of proof rests with you.  Thus, you must show the SBA's decision was in error by a preponderance of the evidence.

How Do You Prove Error of Fact or Law?

To meet your burden of proof, you will need to submit various documents described by SBA rules.  Moreover, you will have to include a legal brief showing how the facts and law prove the SBA made an error.

Contact Protect Law Group Today For a Case Evaluation About Denial of PPP Loan Application

Our attorneys have the experience to aggressively represent you in front of the SBA and the OHA.    Contact our offices today to set up your evaluation with one of our attorneys.

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$50,000 SBA 7A LOAN - RESPONSE TO SBA OFFICIAL 60-DAY NOTICE

$50,000 SBA 7A LOAN - RESPONSE TO SBA OFFICIAL 60-DAY NOTICE

Client received the SBA's Official 60-Day Notice for a loan that was obtained by her small business in 2001.  The SBA loan went into default in 2004 but after hearing nothing from the SBA lender or the SBA for 20 years, out of the blue, she received the SBA's collection due process notice which provided her with only one of four options: (1) repay the entire accelerated balance immediately; (2) negotiate a repayment arrangement; (3) challenge the legal enforceability of the debt with evidence; or (4) request an OHA hearing before a U.S. Administrative Law Judge.

Client hired the Firm to represent her with only 13 days left before the expiration deadline to respond to the SBA's Official 60-Day Notice.  The Firm attorneys immediately researched the SBA's Official loan database to obtain information regarding the 7(a) loan.  Thereafter, the Firm attorneys conducted legal research and asserted certain affirmative defenses challenging the legal enforceability of the debt.  A written response was timely filed to the 60-Day Notice with the SBA subsequently agreeing with the client's affirmative defenses and legal arguments.  As a result, the SBA rendered a decision immediately terminating collection of the debt against the client's alleged personal guarantee liability saving her $50,000.

$505,000 SBA 7A LOAN - FEDERAL DISTRICT COURT LITIGATION (CALIFORNIA)

$505,000 SBA 7A LOAN - FEDERAL DISTRICT COURT LITIGATION (CALIFORNIA)

Clients borrowed and personally guaranteed an SBA 7(a) loan.  Clients defaulted on the SBA loan and were sued in federal district court for breach of contract.  The SBA lender demanded the Client pledge several personal real estate properties as collateral to reinstate and secure the defaulted SBA loan.  We were subsequently hired to intervene and aggressively defend the lawsuit.  After several months of litigation, our attorneys negotiated a reinstatement of the SBA loan and a structured workout that did not involve any liens against the Client's personal real estate holdings.

$430,000 SBA 7A LOAN - NEGOTIATED WORKOUT AGREEMENT

$430,000 SBA 7A LOAN - NEGOTIATED WORKOUT AGREEMENT

Clients' 7(a) loan was referred to Treasury's Bureau of Fiscal Service for enforced collection in 2015. They not only personally guaranteed the loan, but also pledged their primary residence as additional collateral.  One of the clients filed for Chapter 7 bankruptcy thinking that it would discharge the SBA 7(a) lien encumbering their home. They later discovered that they were mistakenly advised. The Firm was subsequently hired to review their case and defend against a series of collection actions. Eventually, we were able to negotiate a structured workout for $180,000 directly with the SBA, saving them approximately $250,000 (by reducing the default interest rate and removing Treasury's substantial collection fees) and from possible foreclosure.

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