Federal Administrative Practice

SBA Office of Hearings and Appeals (OHA): PPP, Debt Collection, and Motion-to-Dismiss Response

A practitioner-level working guide to OHA procedure under 13 C.F.R. Part 134, the administrative debt collection backstop in 13 C.F.R. Part 140, the PPP forgiveness denial appeal track in section 134.1201 et seq., and how I would build a response to an SBA motion to dismiss in a live OHA docket.

What OHA is, in one paragraph

OHA is the administrative tribunal inside the U.S. Small Business Administration. The judges are administrative law judges; the procedural code is 13 C.F.R. Part 134. OHA hears size and NAICS appeals, 8(a) program disputes, suspension and debarment, contracting-program decisions, and, after the CARES Act, PPP loan review appeals under Subpart L (sections 134.1201 et seq.). PPP forgiveness denials and resulting administrative debt collection actions are the bulk of OHA's recent docket. Proceedings are on the written record by default. Motions to dismiss for lack of jurisdiction or untimeliness are routine, and the petitioner carries the burden under the clear-error standard of review.

The three regulatory pieces that always matter

13 C.F.R. Part 134, Subpart B (general rules of practice)

Subpart B governs filing, service, motions, default, evidence, and decisions across all OHA cases. Key practitioner sections include 13 C.F.R. section 134.211 (motions, with subsection (e) addressing motions to dismiss), section 134.227 (reconsideration), and the Subpart B default and dismissal provisions. On a motion to dismiss, the response window under section 134.211 is short, and the failure to respond can be treated as default. The deadline must be calendared as a hard date the moment the motion is served.

13 C.F.R. Part 134, Subpart L (PPP appeal track)

Subpart L is the rule-set that controls PPP forgiveness denial appeals specifically. Section 134.1201 defines what constitutes a final SBA loan review decision (the jurisdictional hook). Section 134.1202 sets the 30-day appeal window. Section 134.1203 dictates the contents of the appeal petition. Section 134.1204 covers OHA's standard of review (clear error of fact or law). Section 134.1206 governs the SBA's administrative record. Section 134.1209 covers oral hearings (rare; OHA's strong default is the written record). If the Administrator moves to dismiss on jurisdictional grounds, almost all of the relevant authority lives in Subpart L.

13 C.F.R. Part 140 (SBA administrative debt collection)

Part 140 implements the Debt Collection Improvement Act and the Federal Claims Collection Standards (31 C.F.R. Parts 900-904) inside the SBA. It governs how the SBA validates, notices, and collects debts: administrative offset, salary offset, administrative wage garnishment, Treasury referral, and credit-bureau reporting. Part 140 also requires written notice with appeal-rights language, the opportunity to inspect and copy records, and an opportunity to dispute the debt and enter a repayment agreement before enforced collection. A defective Part 140 notice is one of the strongest due-process arguments available when the OHA appeal is paired with a live debt-collection cascade.

PPP forgiveness denial appeal, at a working level

A PPP borrower appeals a final SBA loan review decision by filing a petition with OHA within 30 calendar days under section 134.1202(a). The petition must identify the appealed decision, state the legal and factual grounds, and include supporting documents and statutory or regulatory citations. The SBA Administrator answers and files the administrative record. The standard of review is clear error of fact or law; OHA does not generally take new evidence absent good cause. Common denial bases include eligibility (Schedule C borrower miscalculations, owner-employee caps, ineligible business types under 13 C.F.R. section 120.110), forgiveness calculation issues (covered payroll, FTE reduction, salary reduction safe harbors), and second-draw eligibility (revenue reduction test, prior-loan use of proceeds). The merits-stage strategy depends on which denial basis the SBA pinned in the final loan review decision.

The motion-to-dismiss landscape

OHA dismissal motions in PPP appeals cluster around five fact patterns, and the response strategy is different for each:

Jurisdictional and due process issues that frequently arise

Two issue families recur often enough to expect them in any meaningful PPP OHA appeal:

What a strong response to an OHA motion to dismiss looks like

The response I would build is short, citation-heavy, and laser-focused on jurisdictional facts. The structure I default to:

  1. Introduction (one paragraph). The appealed decision, the date of the final SBA loan review decision, and the date the petition was filed.
  2. Statement of jurisdictional facts. Tied to the administrative record by Bates or page reference, focused on the elements OHA needs to deny dismissal.
  3. Argument I, final agency action. Why the appealed letter qualifies under section 134.1201(b), with the text of the letter cited verbatim.
  4. Argument II, timeliness. Date of transmission to the borrower, proof of receipt, and any equitable tolling. Where Part 140 notice was defective, that argument is preserved here.
  5. Argument III, due process. Where the denial letter or the related debt collection notice failed Part 140 or 31 C.F.R. section 901.2, this argument is preserved for both the OHA proceeding and any parallel collection-side challenge. The argument is preserved at the dismissal stage so it is not waived later.
  6. Argument IV, prejudice / Subpart L policy. Where applicable, the borrower's reliance on the SBA's representations and the public interest in a record-based decision rather than a procedural dismissal.
  7. Conclusion. Specific relief requested, including denial of the motion and an oral hearing under section 134.1209 if oral hearing is appropriate.

The response does not relitigate the merits at the dismissal stage. The merits are reserved for the merits brief on the administrative record. Mixing them invites OHA to rule on the dismissal motion using the petitioner's own merits concessions.

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This page is attorney-supervised informational content prepared by Sergei Tokmakov, Esq., California State Bar #279869. It is not legal advice and does not create an attorney-client relationship. SBA OHA practice is federal administrative practice; a borrower with an active matter should obtain individualized counsel.