Court dashes Church's hopes of obtaining PPP loan

Updated: Feb 24

Federal judge says SBA followed its lending criteria

Federal Judge Frances Tydingco-Gatewood has upheld the U.S. Small Business Administration's decision to disqualify the Archdiocese of Agana from the Paycheck Protection Program due to its bankruptcy status.

The court said SBA simply abided by its own lending criteria and "did not act arbitrarily or capriciously when it excluded bankruptcy debtors in the PPP."

The PPP, a component of the Coronavirus Assistance and Rehabilitation Act signed in March last year, provides loans to help businesses keep their workforce employed during the Covid crisis. Under the program, borrowers may be eligible for PPP loan forgiveness.

Ford Elsaesser, attorney for the archdiocese, said church officials are reviewing the district court's decision thoroughly to determine whether or not to appeal the ruling.

"There are other appeals pending in the Ninth Circuit and elsewhere on the same subject matter," Elsaesser said in a statement.

On June 2, 2020, Archbishop Michael Byrnes sued SBA after the archdiocese's PPP application was denied by a bank the month before.