February 19, 2021: Here’s What to Do If You Were Denied PPP Loan Forgiveness

Gusto Editors

February 19, 2021

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What to do if you were denied PPP loan forgiveness

Last week, we discussed some of the challenges that have prevented Paycheck Protection Program (PPP) funds from getting to small businesses in need. One not insignificant factor was that roughly half of PPP Round 1 borrowers haven’t had their funds forgiven yet, and many are reluctant to apply for more in loans without forgiveness.

If your PPP loan forgiveness application has been rejected, you can appeal the decision. Gusto’s Payroll Compliance Lead Shelly Abril breaks down the process for borrowers:

Step 1: Collect the following info and documentation:

  • A copy of the SBA loan review decision or a description of that decision
  • Your statement as to why the decision is believed to be incorrect, along with factual information and legal arguments that support your statement 
  • The forgiveness amount being sought
  • Signed copies of payroll tax filings reported to IRS and the state, quarterly business and individual employee wage reporting, and unemployment insurance tax filings actually reported to the relevant state, for the relevant periods of time (if not included in the PPP Forgiveness Application) or an explanation as to why they are not relevant or not available
  • Signed copies of applicable federal tax returns actually filed with the IRS with appropriate schedules documenting income for self-employed individuals or partners, or an explanation as to why they are not relevant or not available
  • Name, address, telephone number, email address, and signature of appellant or attorney
  • Evidence that your appeal has been filed within 30 days of the final decision

Step 2: Submit your appeal within 30 days of the final decision. You must do this yourself; your lender cannot submit the appeal on your behalf. 

Step 3: Mail your appeal to the following address:

Associate General Counsel for Litigation

U.S. Small Business Administration

409 Third Street SW

Washington, DC 20416

Or, email it to: [email protected]

For more helpful PPP FAQs, visit Gusto’s blog.

New from Gusto


  • *NEW DATE* Mar. 3: How To Achieve Permanent Profitability Within the Next 24 Hours — Learn how to master the Profit First methodology to drive permanent profit in your business with Mike Michalowicz, the author of Profit First, and Cyndi Thomason, President at Bookskeep. Register here.
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Top relief options for the week

  • Stavros Niarchos Foundation (SNF) Small Business Growth & Recovery Fund offers US-based small businesses up to $20,000 each, which does not need to be repaid, along with virtual training and mentorship. The program focuses on businesses owned by people of color, women, and veterans as well as those in lower-income communities.
  • West Hollywood Small Business Grant Program allocates $250,000 in funds to assist eligible and qualified small businesses with $5,000 grants to meet operating expenses and retain or hire staff. Applications are open through February 25, 2021.
  • Marin County, California’s Small Business Fund launches on February 22, 2021 to support Marin County-based businesses that have been financially impacted by the COVID-19 pandemic. Borrowers can apply for a 0%-interest loan to cover certain qualifying business expenses. 
  • See more relief options in our Small Business Relief Finder.

Want more small business news and resources? Check out past editions in our archive.

Gusto Editors Gusto Editors, contributing authors on Gusto, provide actionable tips and expert advice on HR and payroll for successful business management.
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