PPP Loan Not Forgiven and Now Due: 5 Options Before It Goes to Collections

A PPP balance requires a response based on the decision already made, not a renewed assumption that forgiveness will arrive because the money was used for payroll.

The SBA current PPP forgiveness information measures the application limit from the date the agency issued the loan number. The notice in hand establishes the starting point. Everything else follows from it.

The Decision Already Made

Some borrowers face an unresolved application, others a lender decision, and others a final agency review determination or a balance remaining after partial forgiveness. These positions require different documents and different next steps, and anyone recommending another application or a payment commitment before identifying the position is advising in the dark.

Read the paper for what it is. A letter relaying another office determination should be kept with the underlying determination itself, since the identity of the decision maker controls the procedure available next.

The file, not the memory of the portal, governs. Seldom does the notice explain itself on first reading. The draft existed. The application never did.

Unresolved Applications and the Loan Number Date

Long after the covered period ended, owners still discover drafts saved in a lender portal that were never transmitted, which is why the first task is to locate the loan number date, the application submitted, and proof of its receipt rather than assume a new application remains available merely because an older article says forgiveness can be requested later.

Where the business has changed accountants, obtain the prior preparer complete submission file before commissioning another review (the later adviser needs the figures originally supplied, not only a current explanation of them, and the discrepancies between the two versions often reveal the issue that stalled the application in the first place). The portal shows numbers the way a winter window shows a street: accurately, and without warmth.

Resist the urge to reconstruct the missing record from memory. Do not manufacture supporting payroll records after the fact. If a record cannot be located, tell the adviser what is missing and what independent documentation may exist. A candid account of an incomplete file serves the business better than a reconstructed document presented as an original, and counsel can assess the actual submission only from the records as submitted, with later corrections identifiable rather than silently substituted.

If the lender says records are missing, request a specific list.

Forgiveness was a procedure with a window. The window is established by the loan number date, not by the owner recollection of it.

Lender Decisions Beside Final Agency Decisions

The SBA Office of Hearings and Appeals guidance draws a distinction, if we are being precise about jurisdiction, between lender decisions and appealable final agency loan review decisions, and the office does not have jurisdiction to review a lender decision merely because it concerns a PPP loan.

For a final agency decision within that jurisdiction, the guidance describes a 30 calendar day appeal period after receipt. An extremely tight period in which to assemble a reasoned submission. Counsel should assess the actual determination and deadline from the document itself and ensure no parallel lender correspondence is mistaken for the appeal. I am less certain about portal timing than the preceding paragraph might suggest. A request to the lender for clarification should never be assumed to extend an independent appeal requirement, however uncanny the coincidence of deadlines may appear, and the appeal submission should identify why the decision is said to be erroneous with records tied to the eligibility finding, amount, or use of proceeds under review.

Where appeal related deferment is available, the guidance directs appellants to provide the lender with a copy of the appeal. Preserve and file evidence of that communication. The filing and a change in the lender records should not be treated as the same event (counsel sees this confusion weekly, though the sample is not scientific), and advice about payment status during review belongs to counsel, not to assumption.

The Balance and the Budget

Request the account history showing principal, credited forgiveness, payments, interest, and any disputed item. Partial forgiveness should appear as a defined amount rather than an unexplained reduction. Account for funds sent, or promised, without written direction, and no statement made against interest in a hurried call can substitute for the written record. The owner should be able to connect the balance to the lender records and the agency determination, marking any payment that appears on one record but not the other.

Ask for an explanation of when repayment became due under the applicable documents and program instructions. An owner should not rely on an old calendar prepared before a review or forgiveness decision. No one reconstructs these accounts without error on the first pass. If the business cannot meet the stated payment, present a forecast grounded in available cash rather than a hoped for award, since a proposed arrangement must be evaluated through the office with authority over the account, and an informal assurance from a third party changes nothing about the obligation, even brief courtesies included.

Some servicers treat a request for an accounting as a signal of evasion. It is the minimum diligence the file requires.

Private Debt Beside the Federal Account

Where private MCA accounts contribute to the same cash shortage, Delancey Street business debt review can be considered for that component of the problem. Confirm the particular debts within its service scope and the work that requires an independently licensed attorney.

The company is not the forgiveness decision maker or a law firm. Its engagement should never be read as a promise that the agency will reverse a determination. Private collectors pursuing related business debts sometimes invoke the federal balance in order to pressure payment on their own accounts. Simply ensure a pending federal deadline is assigned to the appropriate professional rather than lost in a general intake process, and keep the budget honest about charges for each assignment, confirming the office, the account number, and the procedure the notice itself prescribes for response. If collection proceeds, the federal debt collection overview explains that referred obligations can involve different collection programs, and a charge off, referral, or unresolved complaint constitutes extremely useful information without constituting forgiveness. The useful result is a clear record of the amount resolved, the amount still asserted, and the procedure available to address it.