Deferment Period Extended for PPP Borrowers that Appeal Adverse Forgiveness Decisions

Dorsey & Whitney – Effective July 28, 2021, the Small Business Administration (“SBA”) announced a new interim final rule that, inter alia, extends the “deferment period” for borrowers that appeal a final SBA loan review decision.  Borrowers are able to defer paying back principal and interest on their PPP loans during the deferment period which, prior to the new rule, ended after the SBA issued a decision on the borrower’s loan forgiveness application.  For borrowers that appeal the SBA’s forgiveness decision, the new rule extends the deferment period until after the SBA renders a decision on a borrower’s appeal.  Thus, the new rule may provide an additional reason for borrowers to administratively appeal adverse forgiveness decisions.