While there is an appeal process allowed by law with respect to the Paycheck Protection Loan Program, many borrowers are receiving notice of an audit or other review prior to denial. Deadlines in both a preliminary audit/review and the appeal process are critical. The preliminary audit/review period may be even more critical to begin to document the "record" in the event of a denial and need for an appeal. Borrowers should ensure timely response to any preliminary audit/review and that substantial documentation, such as legal memorandums, are submitted in response to any review.

In the event of an appeal, the decision on the appeal will be made by an administrative law judge (ALJ) who will review the petition filed by the borrower, the response of the SBA, and the “record,” that is the documentation submitted by the borrower and the SBA. In order to obtain a reversal of the denial of loan forgiveness, the borrower must convince the ALJ that “the SBA loan review decision was based on clear error of fact or law." Therefore, again, it is important a borrower timely submit any and all documentation into the "record" and that the borrower work to overcome any objection before being required to appeal.