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Request for PPP Loan Repayment

Request for PPP Loan Repayment

Due to a high volume of calls, we are unable to take on more PPP clients at this time. However, we have created a list of PPP resources that should help you with any challenges that you might have.


PPP Resources:


Find an attorney to defend you –
  Find an attorney to help you obtain a loan –
  Report fraud/theft –
  How to apply for a loan on your own –
  What to do if the SBA doesn’t forgive your loan –

Dr. Nick Oberheiden is a nationally recognized expert on PPP loan laws
and has been seen on Forbes, CNBC and Fox Business.
Speak with Dr. Oberheiden today for a free consultation at 888-680-1745.

Some companies are being asked to repay their Paycheck Protection Program (PPP) loans, either in part or in full. If your company has received a PPP loan repayment request from the U.S. Small Business Administration (SBA), our federal compliance lawyers can help you determine your next steps.<

When Congress announced the establishment of the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, many companies and individuals saw the program as an opportunity to obtain “free” money from the federal government. This was due to a provision in the PPP that allowed for complete forgiveness of loans issued under the program provided that certain conditions were met. In fact, companies that comply with the terms of the program can indeed ultimately receive free federal funds; but, as companies begin submitting forgiveness applications to their lenders, many are facing requests to repay some or all of their PPP loan funds.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden



Lynette S. Byrd
Lynette S. Byrd

Former DOJ Trial Attorney


Brian J. Kuester
Brian J. Kuester

Former U.S. Attorney

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney

Local Counsel

John W. Sellers
John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara
Linda Julin McNamara

Federal Appeals Attorney

Aaron L. Wiley
Aaron L. Wiley

Former DOJ attorney

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (DOJ)

Chris Quick
Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow
Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Why is the SBA Requesting that My Company Repay its PPP Loan?

If the U.S. Small Business Administration (SBA) is seeking repayment of your company’s PPP loan, there are potentially several reasons why. The ability to obtain forgiveness of a PPP loan comes with strings attached, and non-compliance with any aspect of the PPP can potentially trigger a full or partial obligation to repay. For example, issues that may result in loss of eligibility for PPP loan forgiveness include:

1. Misrepresentations in a Company’s PPP Loan Application

If, upon review, a lender or the SBA determines or discovers that a company’s PPP loan application contained misrepresentations, this could lead to a request for repayment. Access to PPP loans requires compliance with certain eligibility criteria, and the SBA’s Office of Inspector General (SBA-OIG) is already investigating multiple cases of PPP loan application fraud in conjunction with the U.S. Department of Justice (DOJ). Misrepresentations, whether intentional or unintentional, that can lead to PPP loan repayment requests include those regarding:

  • Number of employees
  • Qualification as a “small business concern”
  • Payroll expenses (in order to be eligible, companies must devote 60% of their PPP loans to approved payroll costs)
  • Company formation date and corporate affiliations
  • Prior PPP loan applications submitted

2. Lack of Necessity for Obtaining a PPP Loan

Even if a company satisfies the basic criteria for PPP loan qualification, it still may not be eligible to receive a PPP loan. This is due to the “necessity” requirement written into the program under the CARES Act. Specifically, when applying for a PPP loan, the applicant must certify that, “the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the eligible recipient.” If the SBA determines that a company’s necessity certification is fraudulent, then it may deny forgiveness and demand repayment of the company’s PPP loan in full.

3. Unauthorized Use of PPP Loan Funds

As a federal government stimulus program designed to combat the economic impacts of the recent pandemic, the PPP limits the purposes for which loan recipients may use their federal funds. Specifically, companies may only use their PPP loan funds to pay payroll expenses, mortgage interest and rent owed under preexisting obligations, insurance premiums, and utilities. Any other use of PPP loan funds is unauthorized, and unauthorized use of funds is grounds for denial of forgiveness under the terms of the program.

4. Use of PPP Loan Funds for Personal Expenses or Other Unlawful Purposes

In particular, but without limiting the foregoing, the SBA (and the DOJ) are monitoring for evidence of PPP loan funds being used for personal expenses and other unlawful purposes. Company owners and executives who divert PPP loan funds for personal use can potentially face criminal prosecution in addition to facing an obligation to repay. Likewise, in a Fact Sheet discussing the requirements for PPP loan eligibility and forgiveness, the U.S. Treasury Department stated that, “if the proceeds are used for fraudulent purposes, the U.S. government will pursue criminal charges against you.”

5. Unsubstantiated Application for PPP Loan Forgiveness

Finally, in order to secure forgiveness under the PPP, loan recipients must certify compliance, and they must submit documentation supporting their certification. Lack of supporting documentation is being viewed as a red flag; and, currently, the SBA conducting audits at the time that companies submit their forgiveness applications. As explained in the SBA’s PPP FAQs:

“To further ensure PPP loans are limited to eligible borrowers in need, the SBA has decided, in consultation with the Department of the Treasury, that it will review all loans in excess of $2 million, in addition to other loans as appropriate, following the lender’s submission of the borrower’s loan forgiveness application.”

What Triggers a PPP Loan Repayment Request?

Currently, most PPP loan repayment requests are being triggered by the submission of loan forgiveness applications. As noted in the quote above, the SBA is reviewing loan recipients’ files at the time that they apply for forgiveness with their lenders. If the SBA’s review uncovers evidence of any of the issues listed in the previous section, this may lead to a denial of forgiveness and an immediate request for repayment of the loan funds, with interest as called for under the program.

As the SBA-OIG and the DOJ continue to investigate allegations of PPP loan fraud, and as banks supply information to these federal authorities in response to subpoenas and other requests, it is possible that requests for repayment of PPP loans could come prior to the submission of companies’ forgiveness applications as well. Ultimately, companies that received PPP loans must be prepared to demonstrate compliance at any time, as the inability to do so could lead to swift ramifications.

What Can Companies Do to Challenge Requests for Repayment of PPP Loans?

What if you disagree with the SBA’s determination that your company is required to repay its PPP loan? As this is a relatively novel issue, the procedures for challenging PPP loan repayment requests are still being worked out. Generally speaking, however, companies facing PPP loan repayment requests will need to engage federal defense counsel promptly, as they will need to take affirmative steps to challenge the SBA’s denial of forgiveness and avoid repayment liability.

At Oberheiden P.C., we are representing companies nationwide with respect to all aspects of PPP loan compliance and PPP loan fraud defense. If your company is preparing to submit a PPP loan forgiveness application, we can assess your company’s forgiveness eligibility and help you remedy any outstanding concerns. We can also represent your company in its interactions with its PPP lender and the SBA; and, if an issue arises, we can work proactively to resolve the issue in favor of forgiveness.

Can a PPP Loan Repayment Request Lead to a Federal Audit or Investigation?

In addition to the possibility of facing a loan repayment request, companies that submit forgiveness applications under the PPP are also at risk for facing federal audits and investigations. As noted above, the SBA is automatically auditing many PPP loan recipients at the time they submit their forgiveness applications; but, if a request for repayment comes first (i.e. as a result of information obtained from a PPP lender), it is possible that an audit could follow.

Likewise, if the SBA determines that repayment is required based on one or more of the factors listed above, a repayment request could also potentially trigger an investigation by the SBA-OIG or the DOJ for PPP loan fraud. Both of these agencies are aggressively targeting individuals and companies suspected of fraud, and those accused of fraud are facing a broad range of federal criminal charges. Additionally, the Internal Revenue Service (IRS) is targeting PPP loan recipients for civil and criminal tax violations as well, and various other agencies have signaled their intent to closely scrutinize companies accused of fraud under the Paycheck Protection Program.

With this in mind, all companies that received PPP loans should be conducting internal audits and investigations to assess their compliance, and they should be proactively addressing any concerns with regard to loan and/or forgiveness eligibility. Our federal compliance and defense lawyers are available to help, and we encourage you to contact us for more information.

Speak with a PPP Compliance Lawyer at Oberheiden P.C. Today

Headquartered in Dallas, TX, our firm provides nationwide legal representation for companies in all federal compliance and defense matters. This includes matters involving forgiveness eligibility and repayment obligations under the Paycheck Protection Program. With local counsel operating out of offices around the country, and with former senior federal prosecutors and investigative agents available to assist our clients, we offer full-service representation for companies, company owners, and executives facing audits, investigations, and charges.

Do you have questions or concerns about your company’s forgiveness eligibility under the PPP? Have you received a PPP loan repayment request from the SBA? If so, we can help, and we invite you to schedule a complimentary initial case assessment to learn more. To speak with a senior attorney at Oberheiden P.C. in confidence, call 888-680-1745 or send us your contact information online now.

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