Plan document only permits one outstanding loan at a time. A couple of participants were allowed to take out a second loan while their first was still outstanding (within limits for subsequent loans). Can the employer retroactively amend the plan back to the period for which 2 outstanding loans were in existence? Require VCP filing? If not, the alternative?

I think that a VCP application requesting permission to adopt a conforming amendment retroactive to the date of the first such 2nd loan is likely the correct procedure.

If those allowed 2nd loans were HCEs and the 1 loan rule was enforced against any NHCE, you might have a discrimination problem as well.