Criminal Defense Lawyers

How to Appeal a PPP Loan Forgiveness Denial

Last Updated on: 28th November 2025, 06:16 pm

How to Appeal a PPP Loan Forgiveness Denial

Your PPP loan forgiveness just got denied. Maybe the SBA says you weren’t eligable, or that you used the funds wrong, or that your documentation doesn’t add up. Whatever the reason, you now have a choice to make—and you have to make it fast.

You have 30 calendar days to file an appeal with the SBA’s Office of Hearings and Appeals. The clock started when you recieved that denial letter, not when the SBA dated it. If your sitting on this letter for a week or two already, you need to act now.

The good news is that the appeal process exists and its actually possible to win. The SBA makes mistakes, and the Office of Hearings and Appeals has the authority to reverse their decisions when those mistakes are clear. But you have to follow the process exactly, and you have to do it in time.

This guide walks you through everything you need to know about appealing a PPP loan forgiveness denial—what can be appealed, what you need to include, how to file, and what happens after you submit your appeal.

Understanding What Can (and Can’t) Be Appealed

Before you start working on your appeal, you need to understand weather you actually have something that can be appealed to the SBA Office of Hearings and Appeals (OHA). Not every denial qualifies.

OHA has jurisdiction over appeals where the SBA—not your lender—has issued a final loan review decision. Specifically, you can appeal when:

– The SBA found you were ineligable for your PPP loan entirely
– The SBA found you were ineligable for the loan amount you recieved
– The SBA found you were ineligable for loan forgiveness (full or partial)
– The SBA found you made unauthorized use of PPP funds

Heres what you cannot appeal to OHA: decisions made by your lender alone. If your lender denied your forgiveness application without any SBA review, you need to dispute that with your lender directly, not with OHA. OHA only handles appeals of SBA loan review decisions.

Who has standing to file an appeal? Only the borrower—the actual business entity that recieved the PPP loan—or its legal successor in interest. If you sold your business, the new owner may have standing depending on how the transaction was structured.

Individual owners of the borrower entity do not have standing to appeal on their own behalf. If your LLC recieved the PPP loan, the LLC must file the appeal, not you personally as an individual. Lenders also cannot appeal on behalf of borrowers—only the borrower itself can pursue an appeal.

If your not sure weather your situation qualifies for an OHA appeal, the safest approach is to file anyway if you have any reasonable argument. Missing the deadline because you weren’t sure is much worse then filing and having OHA determine they don’t have jurisdiction.

The 30-Day Deadline: Don’t Miss It

This cannot be stressed enough: you have exactly 30 calendar days from the date you recieved the final SBA loan review decision to file your appeal. Calendar days means weekends and holidays count. If your 30th day falls on a Saturday, Sunday, or federal holiday, you get untill the next business day—but dont count on that cushion.

Notice that the deadline runs from when you recieved the decision, not from the date on the letter. This distinction matters. If the SBA dated their decision January 1st but it didn’t arrive in your mail untill January 10th, your deadline runs from January 10th. Keep the envelope with the postmark if you can—this could become relevant if theirs any dispute about timing.

What happens if you miss the deadline? Your appeal rights are gone. Period. OHA will not accept late filings except in extraordinarily rare circumstances involving fraud or mistake, and even then, success is almost never guarenteed. Practically speaking, if you miss the 30-day deadline, you’ve lost your chance to appeal through OHA.

Given whats at stake, dont wait untill day 29 to start working on your appeal. You need time to gather documents, draft your statement of why the SBA’s decision was wrong, and review everything for accuracy. Starting the process immediatley after recieving a denial gives you the best chance of putting together a strong appeal.

One more thing: you also need to provide your lender with a copy of your appeal. This is important because filing a timely appeal extends the deferment period on your PPP loan. Your payments stay deferred untill OHA issues a final decision. But your lender needs to know that an appeal has been filed to keep your loan in deferment status.

What You Need to Include in Your Appeal Petition

Your appeal petition needs to include several specific items. Missing any of these could result in your appeal being rejected or delayed, so pay close attention to this list.

1. A copy of the final SBA loan review decision you’re appealing

This is the letter or document you recieved from the SBA explaining why your forgiveness was denied. Include the complete document—all pages. The appeal needs to identify exactly which decision your challenging.

2. The date you recieved the decision

This establishes that your appeal is timely. Be accurate here. If you dont remember the exact date, look for the postmark on the envelope or check when it showed up in your email if it was delivered electronically. Providing a wrong date that makes your appeal look late could be fatal to your case.

3. A full and specific statement explaining why the SBA’s decision is wrong

This is the heart of your appeal. You can’t just say “I disagree with the decision.” You need to explain specifically what error the SBA made—was it a factual error (they got the numbers wrong), a legal error (they misapplied the eligability rules), or both?

Be detailed. If the SBA said you had too many employees to qualify, explain why their employee count is wrong. If they said your business type was ineligable, explain why their interpretation of the ineligability rules doesn’t apply to your situation. If they said you didn’t provide sufficient documentation, explain what documentation you provided and why it should have been sufficient.

The more specific you can be, the better. Vague complaints about unfairness won’t get you anywhere. You need to point to actual errors in the SBAs reasoning.

4. All factual information and legal arguments supporting your position

This goes hand-in-hand with your statement of error. Include any facts that support your case—numbers, dates, documents, anything that proves the SBA got it wrong. If their are relevant legal arguments about how the PPP rules should be interpreted, make those arguments clearly.

Think of this like making a case in court. The Administrative Law Judge reviewing your appeal wasn’t involved in the original decision. They only know what you and the SBA tell them. If their’s evidence that helps you, you need to include it.

5. Your contact information and signature

Include your name (or your company’s name if the borrower is an entity), your address, telephone number, email address, and your signature. If an attorney is filing on your behalf, include the attorney’s information and signature.

6. Signed copies of payroll tax filings to the IRS

Unless you already provided these with your original forgiveness application, you need to include signed copies of the payroll tax filings you actually reported to the IRS. Form 941s are typical. If these documents aren’t relevant to your situation—say, your a sole proprietor who doesn’t file Form 941—you need to explain why their not relevant or not available.

7. State quarterly wage reporting and unemployment insurance tax filings

Similar to the IRS filings, you need to include signed copies of the wage and unemployment reports you filed with your state, unless you already provided them or they’re not applicable. Again, if their not relevant or available, explain why.

The goverment wants this documentation because alot of PPP fraud involved fake employees and inflated payroll numbers. Providing your actual tax filings lets OHA verify that what you claimed on your PPP application matches what you reported to tax authorities.

8. Any other supporting evidence

Beyond the required items, include anything else that supports your position. Bank statements showing how you used the funds. Contracts or agreements that prove your business operations. Third-party documentation that verifies the information on your application. The more evidence you have that the SBA got it wrong, the stronger your appeal.

One common mistake is submitting a petition thats too brief. Some borrowers think they just need to check a few boxes and say “I disagree.” That approach almost never works. Your petition should be thorough, detailed, and supported by documentation. If the SBA says you had 100 employees but you only had 45, dont just say “thats wrong”—provide the payroll records, the tax filings, the organizational charts, anything that proves you had 45 employees.

Another mistake is being disorganized. The ALJ reviewing your case is going to look at potentialy dozens of appeals. Make it easy for them to understand your argument. Organize your documents logically, label everything clearly, and present your arguments in a structured way. If your appeal is a confusing mess of random documents with no clear explanation, your not doing yourself any favors.

How to Actually File Your Appeal

This is where many people mess up: PPP appeals must be filed through the SBA’s online appeals portal at appeals.sba.gov. This is the only accepted method. If you mail your appeal, email it, fax it, or deliver it in person to an SBA office, it may be rejected and not processed.

Go to appeals.sba.gov and create an account if you dont already have one. The portal will guide you through the filing process. You’ll upload your petition and all supporting documents electronically.

A few practical tips for using the portal:

– Make sure your documents are in accepted formats (PDF is safest)
– Check file size limits before uploading large documents
– Get a confirmation that your filing was recieved
– Save or print the confirmation for your records
– Double-check that all required fields are complete before submitting

If you have questions about the filing process, you can contact OHA at OHApppinquiries@sba.gov. Their not going to give you legal advice about your appeal, but they can answer procedural questions about how to use the system.

After you file, dont forget to send a copy to your lender. This keeps your loan in deferment status during the appeal. Your lender needs to know the appeal is pending.

What Happens During the Appeal Process

Once your appeal is filed, heres what to expect over the next several months.

First, OHA will review your petition to make sure it’s complete and that they have jurisdiction over your appeal. If everything checks out, your case gets assigned to an Administrative Law Judge (ALJ). If something’s missing or their’s a jurisdictional problem, you’ll get a notice explaining the issue.

The ALJ will issue a Notice and Order that sets the schedule for your case. Typically, this notice will specify that the record will close 45 calendar days from the date of the order. During this 45-day period, both you and the SBA can submit additional evidence and arguments.

The SBA will have the opportunity to respond to your appeal, explaining why they believe their original decision was correct. You may have a chance to respond to the SBAs arguments. Everything happens through written submissions—their generally isn’t an in-person hearing for PPP appeals, though the ALJ has discretion to hold one if needed.

After the record closes, OHA has another 45 calendar days to issue a decision. So from filing to decision, your looking at roughly 90 days total. It could be slightly faster or slower depending on the complexity of your case and OHA’s workload, but 90 days is the general timeframe.

During this entire period, your PPP loan payments remain deferred. You dont have to start repaying the loan untill OHA issues a final decision. This is one of the major benefits of filing an appeal—it buys you time even if you ultimately dont win.

You wont get regular updates during the process. OHA isn’t going to send you weekly status reports. You file your appeal, you wait, and eventually you get a decision. If you need to check the status of your case, you can do so through the appeals portal.

What should you be doing during this waiting period? First, make sure you can be reached at the contact information you provided. If you change your phone number or email address, update your information with OHA. Second, if you discover additional evidence that supports your case during the 45-day open record period, submit it promptly. Third, monitor for any orders or communications from OHA that might require a response. Finally, stay in touch with your lender so they know the appeal is still pending and your loan stays in deferment.

Some borrowers wonder weather they should proactivley contact OHA during the process. Generally, no. The ALJ has your petition, the SBA will respond, and the process will unfold. Calling to ask “whats happening with my case” every week isn’t going to speed things up and might annoy the people handling your appeal. Unless you have a specific question or issue that needs addressing, patience is your best approach.

The Standard of Review: What OHA Looks For

Understanding how OHA evaluates appeals helps you frame your arguments effectively. The standard of review is whether the SBA loan review decision was based on “clear error of fact or law.”

What does “clear error” mean? It means the SBA made an obvious mistake that should have led to a different outcome. Your not arguing that reasonable people could disagree—your arguing that the SBA got it demonstrably wrong.

Clear error of fact means the SBA based their decision on incorrect information. Maybe they miscounted your employees, or used the wrong payroll numbers, or thought your business was in a different industry then it actually was. If you can show that the facts they relied on were wrong, thats a clear factual error.

Clear error of law means the SBA misapplied the rules. Maybe they interpreted an eligability requirement incorrectly, or applied a rule that doesn’t actually apply to your situation, or ignored a rule that should have helped you. If you can show that the law says one thing but the SBA did something different, thats a legal error.

Based on its review, OHA can do three things:

– Affirm the SBA’s decision (you lose)
– Reverse the SBA’s decision (you win)
– Remand the case back to the SBA for further consideration

A remand isn’t exactly a win or a loss—it means OHA found problems with how the SBA handled your case and is sending it back for another look. This could ultimately result in your forgiveness being approved, or it could result in the same denial after the SBA addresses the issues OHA identified.

When preparing your appeal, focus on demonstrating clear errors. Dont waste words on emotional appeals or complaints about how unfair the process feels. Stick to the facts and the law. What specifically did the SBA get wrong? What evidence proves they were wrong? Thats what wins appeals.

Some common types of SBA errors that have resulted in successful appeals include:

– Miscounting employees by including people who weren’t actually employees or using the wrong time period for the count
– Misapplying the affiliate rules by treating related businesses as affiliates when the technical requirements for affiliation weren’t met
– Failing to consider documentation that was actually submitted with the original application
– Misinterpreting the eligible use of funds rules
– Applying the wrong industry exclusion to a business that didn’t actually fall into that category
– Using incorrect payroll calculations due to confusion about what costs count toward the forgiveness calculation

If any of these situations sound like what happened to you, focus your appeal on explaining exactly how the SBA’s analysis was wrong. Provide the correct information with documentation to support it. The clearer you can make it that the SBA simply got the facts or the law wrong, the better your chances of success.

After the Decision: What Are Your Options

Once OHA issues its decision, you have a few potential paths depending on the outcome.

If you win: Congratulations. The SBA’s denial is reversed, and your forgiveness should be processed. Keep in mind that even after winning an appeal, the paperwork may take time to work through the system. Follow up with your lender if you don’t see the forgiveness reflected in your account within a reasonable timeframe.

If you lose and want to challenge the decision: You have two options.

First, you can request reconsideration from OHA. You have only 10 calendar days after service of the ALJ’s decision to file a request for reconsideration through the OHA portal. Reconsideration is not automatic—you need to show that the ALJ made an error in their decision or that new evidence has become available that couldn’t have been presented earlier. Reconsideration requests are rarely granted, but if you genuinely believe the ALJ got it wrong, this is your first option.

Second, you can file an appeal with the Federal District Court. This takes your case outside the SBA system entirely and into the federal court system. District court litigation is expensive, time-consuming, and complex. You would almost certainly need an attorney, and the costs could easily exceed the amount of forgiveness at stake for smaller loans. But for larger loans where hundreds of thousands or millions of dollars are on the line, federal court may be worth pursuing.

If you lose and decide not to challenge further: Your loan comes out of deferment and you’ll need to start repaying it. Work with your lender to understand your repayment options. The loan terms should be the original PPP terms—1% interest rate, typically with a 5-year maturity. If you cant afford the payments, discuss hardship options with your lender, though they’re not required to offer any.

Regardless of the outcome, the appeal process at least bought you time. You weren’t making payments during the appeal, which may have been valuable even if the final result wasn’t what you hoped for.

Do You Need an Attorney?

Technically, no. You’re not required to hire an attorney to file a PPP appeal. Many borrowers file and handle appeals on their own.

That said, weather you should hire an attorney depends on several factors:

How much is at stake? If your fighting for $30,000 in forgiveness, spending $15,000 on legal fees might not make sense. If your fighting for $500,000 or more, professional help is probably worthwhile.

How complex is your case? Some denials involve straightforward factual disputes that any organized person can address. Others involve complicated legal interpretations of the PPP rules. If your case involves complex affiliate relationships, questions about business eligability categories, or sophisticated financial calculations, an attorney can help.

How comfortable are you with legal processes? The appeal system has specific rules and procedures. If you’ve never dealt with administrative appeals before, the learning curve is real. An attorney who handles these cases regularly knows how to present arguments effectively and avoid common mistakes.

If you decide to hire an attorney, look for someone with experience in SBA matters specifically. A general business attorney might be helpful, but someone who actually handles PPP appeals will know the ins and outs of the process better.

At minimum, consider a consultation with an attorney even if you plan to handle the appeal yourself. Many attorneys offer free or low-cost initial consultations where they can review your situation and give you an honest assessment of your chances and what it would take to pursue the appeal effectively.

Act Now—The Clock Is Running

If you’ve recieved a PPP loan forgiveness denial, the most important thing you can do right now is calculate your deadline and start gathering your materials. That 30-day window closes faster then you think.

Pull together your original PPP application, your forgiveness application, all the supporting documents you submitted, the denial letter, and any payroll and tax records that are relevant to your case. Read through the SBA’s explanation for why they denied your forgiveness and think carefully about what errors they made—factual or legal.

If you need help, reach out to an attorney now, not in two weeks. Attorneys need time to review your case and prepare your appeal, and that 30-day deadline doesn’t care weather your lawyer was busy with other clients.

The appeal process exists because the SBA sometimes gets it wrong. If you believe your forgiveness was improperly denied, you have the right to challenge that decision. But you have to exercise that right correctly and on time. Dont let a missed deadline or a procedural mistake cost you what could be hundreds of thousands of dollars in forgiveness.

Start today. Gather your documents. Understand the requirements. File your appeal before the deadline. Your buisness—and your financial future—may depend on it.