Loan Forgiveness Denied
This week, AFSA joined DACO Investments, Westside Credit Corporation, Inc., Motorists Acceptance Corporation, and Challenge Financial Services in filing an Appellant’s Opening Brief in the 5th Circuit. AFSA’s members, like so many businesses across the country, faced sudden and dramatic revenue shortfalls with the onset of the pandemic.
These businesses applied for and received paycheck protection program (PPP) loans to cover payroll costs to prevent furloughing staff. They did so with the understanding that they would be eligible for loan forgiveness given that they followed PPP guidelines.
When many businesses saw their PPP loan forgiveness applications denied, it was because the Small Business Administration (SBA) claimed for itself the unilateral authority to decide whether small lending businesses (or any other type of small business) would receive PPP loan-forgiveness. The Coronavirus Aid, Relief, and Economic Security Act, however, clearly provides in its statutory text that “any business concern” with up to 500 employees “shall be eligible” to receive such loan forgiveness.
Our the brief, AFSA and other argue that the Court should reverse the district court’s blessing of the SBA’s bureaucratic gamesmanship, while making clear that basic principles of statutory interpretation and reasoned administrative rulemaking under the Administrative Procedure Act (“APA”) apply no matter how busy an agency claims to have been during the COVID-19 crisis.
August 8th, 2024
