SBA Hot Topic Tuesday – Guaranty Purchases on PPP Loans that have been Appealed

May 17, 2022

Delaney Sexton
Contributing Editor

SBA Hot Topic Tuesday – Guaranty Purchases on PPP Loans that have been Appealed

SBA recently discussed guaranty purchases for PPP loans that borrowers have submitted an appeal on the final SBA loan review decision. Borrowers may appeal their partial approvals or declines on PPP forgiveness, but due to the number of appeals, the appeal reviews are taking longer than anticipated.

For any loans that have been on appeal for 60 days or longer, lenders are now able to submit for guaranty purchase on the unforgiven and appealed part of the PPP loan. The guaranty purchase process is the same as the guaranty purchase process for any other type of loan, and there is now a drop-down option for appeals.

On the Guaranteed Purchase tab, click create a new purchase and enter the PPP loan number. Enter the disbursement date, the principal balance of the loan, the interest amount (principal balance remaining times 1%, divided by 365, times the number of days between the disbursement date and the default date), and upload all the necessary supporting documentation. If approved, SBA will pay the lender the principal balance and the amount of interest.

The finances and appeal will be worked out later between the borrower and the SBA.

SBA still has not developed a process for submission of forgiveness in cases where the lender has submitted a guaranty purchase request and been approved, and the borrower later decides to submit a forgiveness request. As a reminder, PPP borrowers can submit a forgiveness request all the way up to the maturity date of the loan. SBA promised at NAAGL that they are working on this process and will release it soon.