SBA Can Deny Virus Loans to Bankrupt Companies, 11th Cir. Rules

The Small Business Administration acted within its discretion when it determined not to accept Paycheck Protection Program applications from bankrupt businesses, the Eleventh Circuit ruled.

Tuesday’s decision overrules a bankruptcy judge in Florida, who approved a $527,000 loan for a radiology practice after finding the SBA’s policy “arbitrary and capricious” in violation of the Administrative Procedure Act.

The U.S. Court of Appeals for the Eleventh Circuit is the second federal appeals court to rule on the issue. In June, the Fifth Circuit held that courts can’t issue injunctions against the SBA that would require it to accept loan applications.

The ...