PPP loan overpayment

[TeraT1219]

I received a second draw PPP loan in January 2021 but did not apply for forgiveness at that time. Fast forward to March of this year.  I was in the process of trying to buy a house and CAVIRS flagged my name because I still owed the balance of the PPP loan.  In order to clear the flag I had to pay the entire loan balance at once.  I made the payment directly to the SBA.  Once the payment cleared and the flag was lifted I applied for forgiveness.  I received an email stating that forgiveness was approved for the full amount of the loan.  They stated that the payment had been sent to my lender (Square).  I have spent the last week on the phone with every possible department and not one person has helped me.  I have been transferred, placed on hold and hung up on and each time I call back no one can give me information on how to go about getting a refund for the overpayment of my loan.  It is ridiculous that a company as big and well known as Square is so unorganized that they can't seem to answer or solve one simple issue.  I am at a loss of what to do.  I can tell you this my patience has run out!!!  This is unacceptable behavior and completely unprofessional.  If it was me that owed your company money you would take it out of my account without notice!!!

[TheRealChipA]

@TeraT1219 Sorry to hear about this mess.  I do have a question.

You stated that you paid the SBA directly?  This seems very strange since the SBA is not a lender, but Square is.  Unforgiven PPP loans should have stayed with Square, so paying the SBA would not have cleared the balance due to Square and probably confused and messed things up a lot.  Why?  Because IF Square did indeed get money from the SBA, they would have applied it to the balance you owed Square — not the SBA — and they would have not seen an overpayment but rather a fulfillment of the loan.  As far as Square would know, there was no overpayment, something that the SBA would also have known when you loan was subsequently “forgiven.”

The more I read your post, the more suspicious I become that you’ve been the victim of some sort of elaborate scam.  When you “paid the SBA directly” how did you do this?  With a check or e-check?  Or via an ACH transfer or what?  Like I said the SBA has never accepted payments on loans made by their lenders.  They direct all such matters to the lenders themselves.  Also, when I applied for forgiveness of my loans, I remember a statement that any forgiveness applications received more than a year after the loan grace period would be rejected for being too late.  I don’t remember Congress changing this.

Anyway, I am just throwing things out there.  Something is wrong here, especially if you made a direct payment and THEN you received supposed SBA forgiveness.  At the very least, I hope you have all of the correspondence, as well as the information about where you sent your payment.

Good luck.

[Sammie_C · Accepted solution]

Hi @TeraT1219!

Thank you so much for your post and we understand your concerns.

A team member from our PPP Loans team has sent over an email to you.

Feel free to respond to that email or let us know if you have any other questions!