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SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recyling Program Printed on Recycled Paper

SBA Procedural Notice

TO: All SBA Employees and Paycheck Protection 

Program Lenders

SUBJECT: Paycheck Protection Program Excess 

Loan Amount Errors

CONTROL NO.: 5000-20078

EFFECTIVE: January 15, 2021

This Notice informs Paycheck Protection Program (PPP) lenders of the effects of “excess loan 

amount errors” made by the borrower or the lender in completing the PPP Borrower Application 

Form (SBA Form 2483, SBA Form 2483-SD, or lender’s equivalent form) or the PPP Lender 

Application Form (SBA Form 2484 or SBA Form 2484-SD) for First Draw PPP Loans and 

Second Draw PPP Loans (collectively, “PPP loans”). 

An excess loan amount error is a borrower or lender error made in good faith that caused a 

borrower to receive a PPP loan amount that exceeds the borrower’s correct maximum loan 

amount under the CARES Act and the Economic Aid Act.1 An excess loan amount error does 

not include a knowing misstatement. Knowing misstatements may result in additional action, 

such as charges for fraud.

Example 1: Borrower Error: Borrower mistakenly failed to subtract amounts 

paid to employees in excess of $100,000 (annualized and prorated) from reported 

payroll costs, as required by the CARES Act and Economic Aid Act. Lender 

performed a good faith review, in a reasonable time, of the borrower’s 

calculations and supporting documents concerning average monthly payroll costs, 

and did not identify an error in the borrower’s calculation of its payroll costs. As 

a result, the loan amount approved for the borrower exceeded the borrower’s 

maximum loan amount.

Example 2: Borrower Error: Borrower mistakenly included payments to an independent 

contractor in its calculation of payroll costs on its PPP Borrower Application Form. 

Lender performed a good-faith review, in a reasonable time, of the borrower’s 

calculations and supporting documents concerning average monthly payroll costs and did 

1

 15 U.S.C. 636(a)(36)(E) and (37)(C).
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SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recyling Program Printed on Recycled Paper

not identify the error. As a result, the loan amount approved for the borrower exceeded 

the borrower’s correct maximum loan amount.

Example 3: Lender Error: Borrower applied for and was eligible for a $25,000 

PPP loan. Lender inadvertently approved borrower for a $35,000 loan due to a 

lender employee data input error. As a result, the borrower’s approved loan 

amount exceeded the borrower’s correct maximum loan amount. 

What is the effect of an excess loan amount error on loan forgiveness? 

A borrower may not receive loan forgiveness for any amount that exceeds the correct maximum 

loan amount permitted by statute for that borrower.2 This is true whether the excess loan amount 

was caused by borrower error or lender error. 

When preparing or reviewing a loan forgiveness application, if a borrower or lender identifies an 

error that resulted in a borrower receiving a larger PPP loan than the borrower was eligible to 

receive, the lender must issue a decision to SBA denying forgiveness for the amount that 

exceeded the borrower’s correct maximum loan amount.3 If an excess loan amount error is 

discovered after the lender has already submitted a forgiveness decision to SBA, the lender 

should promptly request the withdrawal of the lender loan forgiveness decision by notifying

SBA through the SBA Paycheck Protection Platform. The lender may then submit a new lender 

loan forgiveness decision for the correct amount through the SBA Paycheck Protection Platform. 

A borrower must repay any unforgiven portion of a PPP loan.4 If a lender discovers an excess 

loan amount error after SBA has issued a final loan forgiveness decision and remitted payment,

lender must promptly notify the borrower and SBA through the SBA Paycheck Protection 

Platform.

What is the effect of an excess loan amount error on the SBA’s loan guarantee? 

Borrower Error. If an excess loan amount error is due solely to the borrower’s error in 

completing the loan application form, the borrower error does not invalidate SBA’s guarantee of 

the PPP loan. 

2

 See, e.g., 85 Fed. Reg. 33012 (“[I]f SBA determines that the borrower is ineligible for the loan amount or loan 

forgiveness amount claimed by the borrower, SBA will direct the lender to deny the loan forgiveness application in 

whole or part, as appropriate.”); 85 Fed. Reg. 38306 (“If SBA determines in the course of its review that the 

borrower was ineligible for the PPP loan based on the provisions of the CARES Act, SBA rules or guidance 

available at the time of the borrower’s loan application, or the terms of the borrower’s PPP loan application ... the 

loan will not be eligible for loan forgiveness.”). 3

 See 85 Fed. Reg. 33012; 85 Fed. Reg. 38306. The lender’s loan forgiveness decision should also deny forgiveness 

for any other portion of the loan if required under the PPP rules that have been issued by the Small Business 

Administration (SBA) and the Department of the Treasury implementing the Paycheck Protection Program, 

including Second Draw Paycheck Protection

Program Loans, under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act and Economic 

Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. 4

 15 U.S.C. 636(a)(36)(K).
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SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recyling Program Printed on Recycled Paper

For example, if a borrower received a PPP loan amount that exceeds its correct maximum loan 

amount because the borrower incorrectly calculated its payroll costs and a good-faith review, in a 

reasonable time, of the borrower’s calculations and supporting documents concerning average 

monthly payroll cost by the lender did not identify the error, the SBA guarantee would remain in 

effect. However, excessive occurrences or patterns of undetected borrower errors may indicate a 

lender did not perform a good-faith review of borrowers’ calculations or supporting documents 

concerning average monthly payroll costs and could be grounds for further review of the lender 

by SBA, which could affect the guarantee.

Lender Error. If an excess loan amount error is due in whole or in part to the lender’s failure to 

satisfy its obligations under PPP rules5 (as further explained in FAQ 1) and the document 

collection and retention requirements described in the lender application form (SBA Form 2484 

and SBA Form 2484-SD), the SBA guarantee will not apply to the excess loan amount. For 

example, if the lender approved a borrower for a loan amount for which the borrower did not 

submit payroll documentation, it indicates that the lender did not satisfy its PPP lender

obligations (as further explained in FAQ 1) and the document collection and retention 

requirements described in the lender application form (SBA Form 2484 and SBA Form 2484-

SD) with respect to the loan. Accordingly, the SBA guarantee would not apply to the portion of 

the loan amount that exceeds the borrower’s correct maximum loan amount.

What is the effect of an excess loan amount error on a borrower’s obligations? 

If the lender or SBA, as applicable, determines a borrower was ineligible for any portion of its 

loan amount, forgiveness will be denied for the ineligible portion and the borrower must begin 

making payments on the remaining loan amount.6

 Any unforgiven loan amounts remain

obligations of the borrower, even if the borrower was ineligible to receive some or all of the 

loan. 

Questions:

Lenders may call the Lender Hotline at (833) 572-0502 for live assistance regarding platform 

access and support, policy questions and procedures, and Capital Access Financial system 

(CAFS) and SBA’s Electronic Transmission (E-Tran) systems support. Lenders may direct loanspecific inquiries to the SBA Paycheck Protection Platform inbox; general PPP forgiveness 

questions to PPPForgivenessRequests@sba.gov; requests for advanced technical support, API 

support and UAT error support to developer@ussbaforgiveness.com; and requests for assistance 

on SBA Paycheck Protection Platform navigation and platform user experience issues to 

help@ussbaforgiveness.com.

5 These obligations are described in the initial PPP Interim Final Rule (85 Fed. Reg. 20811), subsection C.3. of the 

consolidated PPP Interim Final Rule (posted on SBA’s website Jan. 6, 2021) and subsection (h)(2) of the second 

draw PPP Interim Final Rule (posted on SBA’s website Jan. 6 2021) (collectively, PPP lender obligations). 

6

 See 85 Fed. Reg. 38310-11; see also subsection B.9. of the consolidated PPP Interim Final Rule (posted on SBA’s 

website Jan. 6, 2021). 
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SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete

Must be accompanied by SBA Form 58

Federal Recyling Program Printed on Recycled Paper

Questions concerning this Notice may be directed to the Lender Relations Specialist in the local 

SBA Field Office, which can be found at https://www.sba.gov/tools/localassistance/districtoffices.

Jihoon Kim

Director

Office of Financial Program Operations