Criminal Defense Lawyers

What Should I Do if the SBA Contacts Me About My PPP Loan?

What Should I Do if the SBA Contacts Me About My PPP Loan?

So the Small Business Administration (SBA) reached out to you about your Paycheck Protection Program (PPP) loan. That phone call or letter likely made your stomach drop. Try not to panic. The SBA contacts borrowers for a bunch of reasons, not all bad. Let’s walk through what it might mean and what you should do next.

Why Would the SBA Contact Me?

The SBA oversees all PPP loans, so they monitor borrowers to ensure compliance with the program rules. Here’s why they might be knocking:

Requesting More Documents

All PPP loans over $2 million get reviewed by the SBA. They double check you qualified, used funds correctly, and provided accurate info. Even under $2 mil you might hear from them requesting more documents to verify stuff. Annoying but standard.

Reporting Issues

Lenders have to send reports on all PPP loans to SBA. If anything looks off or they’re missing reports, you’ll get a request to sort it out. Could just be a data entry flub.

Suspected Noncompliance

If SBA flags possible noncompliance on your part, like:

• Not spending 60% on payroll
• Using funds for unallowed purposes
• Not meeting other eligibility criteria

They’ll definitely reach out to investigate. Don’t panic yet, could just need clarification.

Loan Forgiveness Review

After you apply for PPP loan forgiveness, SBA reviews your app and figures out the forgiveable amount. Expect contact from them with follow up questions on your calculations or expenses.

Christine Twomey

2024-03-21

Just had my Divorce case settled 2 months ago after having a horrible experience with another firm. I couldn’t be happier with Claire Banks and Elizabeth Garvey with their outstanding professionalism in doing so with Spodek Law Group. Any time I needed questions answered they were always prompt in doing so with all my uncertainties after 30 yrs of marriage.I feel from the bottom of my heart you will NOT be disappointed with either one. Thanks a million.

Brendan huisman

2024-03-18

Alex Zhik contacted me almost immediately when I reached out to Spodek for a consultation and was able to effectively communicate the path forward/consequences of my legal issue. I immediately agreed to hire Alex for his services and did not regret my choice. He was able to cover my case in court (with 1 day notice) and not only was he able to push my case down, he carefully negotiated a dismissal of the charge altogether. I highly recommend Spodek, and more specifically, Alex Zhik for all of your legal issues. Thanks guys!

Guerline Menard

2024-03-18

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2024-03-15

Believe every single review here about Alex Z!! From our initial consultation, it was evident that Alex possessed a profound understanding of criminal law and a fierce dedication to his clients rights. Throughout the entirety of my case, Alex exhibited unparalleled professionalism and unwavering commitment. What sets Alex apart is not only his legal expertise but also his genuine compassion for his clients. He took the time to thoroughly explain my case, alleviating any concerns I had along the way. His exact words were “I’m not worried about it”. His unwavering support and guidance were invaluable throughout the entire process. I am immensely grateful for Alex's exceptional legal representation and wholeheartedly recommend his services to anyone in need of a skilled criminal defense attorney. Alex Z is not just a lawyer; he is a beacon of hope for those navigating the complexities of the legal system. If you find yourself in need of a dedicated and competent legal advocate, look no further than Alex Z.

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2024-03-15

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2024-03-12

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2024-03-12

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2024-02-28

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2024-02-24

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What Do I Do If the SBA Contacts Me?

Take a breath. The SBA just wants info to verify you used PPP funds properly. How you respond can affect the outcome though. Here are some tips:

1. Gather Your Documents

Pull together anything related to your PPP loan – your application, promissory note, bank statements showing use of proceeds, payroll records, lease agreements, retirement plan documents, tax filings etc. Better to have docs and not need them than scramble later!

2. Review The Rules

Re-read PPP loan program rules so you understand compliance requirements around use of proceeds, payroll spending, FTEs, etc. Make sure you’ve adhered and can speak intelligently if questioned.

3. Respond Quickly

Don’t let SBA requests languish! Respond promptly with requested info. Delay looks bad and reduces time to address any issues.

4. Be Transparent

This one’s huge. Total transparency with SBA builds trust. Explain your situation. Share any mitigating circumstances if you didn’t fully comply. Disclose everything upfront – trying to hide noncompliance only hurts you if discovered later.

5. Get Representation If Needed

If SBA is questioning your eligibility or use of funds or you suspect enforcement action, get legal counsel ASAP. PPP lawyers know the rules cold and can negotiate on your behalf if needed.

What If I Didn’t Comply with PPP Rules?

Mistakes happen. Many borrowers struggled spending 60% on payroll during COVID or had other compliance issues. If you didn’t comply, here are some options:

Apply for Exemptions

SBA exemptions allow forgiveness if you:

• Couldn’t rehire similarly qualified employees
• Couldn’t return to same level business activity

Talk to legal counsel on claiming exemptions. Evidence is required.

Appeal SBA Determinations

If SBA denies your loan forgiveness application or determines you are ineligible, you can appeal within 30 days. Appeals go before SBA Hearing Officers who reassess decisions. Over a third of appeals succeed so it’s worth trying!

Repay Some or All of the Loan

If exemptions or appeals don’t work out, you’ll have to repay non-forgiven amounts:

• 2 year term if disbursed before June 5, 2020
• 5 year term if disbursed after June 5, 2020

The 1% interest still applies. You can begin repayments once your forgiveness amount is determined.

Key Takeaways

An SBA inquiry feels scary but staying calm and responding appropriately helps. Remember:

• SBA oversees all PPP loans and contacts borrowers routinely to verify info and compliance
• Gather documentation related to your loan and review program rules
• Respond to SBA quickly and transparently. Disclose any issues.
• Seek legal counsel if questioned on eligibility or use of funds
• If necessary, apply for exemptions, appeal determinations, or repay non-forgiven amounts

With the right preparation and guidance, you can get through an SBA review just fine. Help is out there – including from lawyers if needed – so don’t panic!

Resources

PPP Loan Program RulesPPP Loan Forgiveness ApplicationSBA PPP Loan Forgiveness Appeals