4 Paths Before It Goes to Collections
PPP Loan Not Forgiven and Now Due

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

Some borrowers face an unresolved application while others face a lender decision, a final agency review determination or a balance remaining after partial forgiveness, and each position calls for different documents and different next steps. The notice on the desk establishes the starting point. Everything else follows from it.

What the Balance Represents

Forgiveness was a determination, not a presumption, and the paperwork often tells a less generous story than memory (which promoters of blanket forgiveness sometimes present as a formality). Locate the application as submitted, the lender response and any agency review decision, and confirm whether the file shows a status labeled unresolved, which means something different from a denial and permits something different in response.

Borrowers often store the demand with years of program correspondence, where it hides among approvals for a program that has ended. The confusion is normal. What the borrower filed, or failed to file, in the forgiveness window will shape every path below.

First Path: Establish the Decision on the Record

In the first week after the demand arrives, the file deserves an inventory before it receives an answer. Often decisive is the date the loan number was issued, the proof that an application was transmitted and received, and the identity of the decider, since OHA guidance on the limits of PPP appeals states the office has no jurisdiction over decisions made by lenders, and a borrower disputing a lender determination must contact the lender directly.

Locate and preserve the portal record showing what was transmitted and whether further information was requested, and simply ask the lender to identify the current status and any decision already issued in writing. Ensure every submission is confirmable and recorded by date, since a draft saved in an account differs from a completed filing. No phone agreement with the lender, even briefly discussed, replaces the written record.

Second Path: Appeal a Final Review Decision

The appeal right expires on a fixed clock. Where the agency has issued a final loan review decision finding ineligibility, an incorrect loan amount, unauthorized use of proceeds or an incorrect forgiveness determination, the borrower may appeal to the Office of Hearings and Appeals within thirty calendar days of receipt, and only the borrower holds that standing, not the lender and not individual owners of the entity.

The filing goes to the appeals filing portal named in the guidance, with a copy of the decision under appeal, a full statement of why the decision is alleged to be erroneous with supporting facts and argument, and the contact information for the borrower or counsel. The administrative record becomes a sealed room the borrower cannot enter after it closes, so the initial submission should confirm and record every ground rather than hold one back for later.

The denial was final. The remedies were not exhausted.

Deferment during appeal is not automatic. It travels with a copy of the filing delivered to the lender.

Only with that decision in hand can the next path be chosen. The result of skipping this inventory is a restless file that answers every question except the current one.

Third Path: Stabilize the Account While Review Pends

An appeal changes the posture of the debt while it pends. Providing the lender a copy of the filed appeal extends the deferment period until the decision becomes final, which makes the delivery of that copy as important as the filing itself, and the borrower should obtain proof the lender received it.

Lenders answer written questions more completely than spoken ones. Current servicing options beyond the appeal deferment are not described in the captured guidance, which limits what this page can promise, though the page names only the appeal deferment as the stated mechanism. Whether additional relief programs will reopen for these balances is not stated anywhere in the inspected pages.

Fourth Path: Prepare for Federal Collection

Balances that remain unresolved can move toward federal collection, where the Bureau uses its programs in order to collect through offset of eligible payments and cross servicing measures that include calls, reporting and wage procedures. The Treasury description of its collection programs sets out these instruments in general terms.

The Treasury referral treats every unresolved balance the same, whatever story travels with it. Notices continue on their own schedule while the borrower decides.

Before Collections Begin

The least costly forum is the earliest one. The thirty day clock is extremely short for a file this old, and an extremely common error is appealing the lender instead of the agency decision, which the appeals office will dismiss for want of jurisdiction along with filings that are incomplete or untimely.

Delancey Street offers a free confidential initial review for owners facing business debt demands, and a borrower with an unforgiven PPP balance can ask whether the account fits the settlement work the company performs (eligibility for any particular account must be confirmed rather than assumed). The company operates as a settlement company and coordinates legal questions with independent counsel, since it is not a law firm. Arguments available against the decision should be weighed before offset actions are taken against refunds and benefits, so counsel should review the decision documents, identify the errors worth preserving, and construct a filing that addresses both the procedural requirements and the substantive merits of the forgiveness record.

Forgiveness decisions close one chapter of the program while collection opens another, and borrowers who act within the stated windows keep the dispute in the forum most likely to consider its merits. That is the discipline these four paths share: an assumption the collection file will not honor has no place in the response. Resist the urge to wait for a clearer letter.