{"ok":true,"canonical_url":"https://dealroom.so/glossary/eligibility-issue","api_url":"https://dealroom.so/api/public/glossary/eligibility-issue","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"eligibility-issue","term":"Eligibility issue","group":"The loan itself","definition":"An eligibility issue means the business or borrower doesn't meet SBA's rules for a 7(a) loan. If discovered later, the SBA can deny its guaranty, leaving you solely responsible for the full loan.","what_it_means":"Lenders are responsible for verifying all SBA eligibility requirements before closing. However, if a problem is found post-closing, the SBA can deny its guaranty. Your due diligence should include a thorough review of the business's and seller's compliance with SBA size standards, industry restrictions, and character requirements.","url":"https://dealroom.so/glossary/eligibility-issue","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"ineligible-businesses-rule","term":"Ineligible businesses rule","url":"https://dealroom.so/glossary/ineligible-businesses-rule"},{"slug":"sba-guaranty","term":"SBA guaranty","url":"https://dealroom.so/glossary/sba-guaranty"},{"slug":"size-standard","term":"Size standard","url":"https://dealroom.so/glossary/size-standard"},{"slug":"good-character","term":"Good character","url":"https://dealroom.so/glossary/good-character"}],"related_questions":[{"question":"What if a lender's internal loan review discovers a potential eligibility issue post-closing?","url":"https://dealroom.so/for-lenders/questions/what-if-a-lender-s-internal-loan-review-discovers-a-potential-eligibility-issue-post-closi"},{"question":"If an eligibility issue is discovered post-closing, what is the impact on the SBA guaranty?","url":"https://dealroom.so/for-lenders/questions/if-an-eligibility-issue-is-discovered-post-closing-what-is-the-impact-on-the-sba-guaranty"},{"question":"What is the impact on the SBA guaranty if a lender discovers an eligibility issue post-closing that would have prevented approval?","url":"https://dealroom.so/for-lenders/questions/what-is-the-impact-on-the-sba-guaranty-if-a-lender-discovers-an-eligibility-issue-post-clo"},{"question":"How long does it typically take for the SBA to issue a guaranty after lender approval?","url":"https://dealroom.so/sba-7a/questions/how-long-does-it-typically-take-for-the-sba-to-issue-a-guaranty-after-lender-approval"},{"question":"What specific criminal history issues are automatic disqualifiers for SBA loan eligibility?","url":"https://dealroom.so/sba-7a/questions/what-specific-criminal-history-issues-are-automatic-disqualifiers-for-sba-loan-eligibility"},{"question":"What are the common reasons for the SBA to deny a 7(a) loan application during its review, beyond eligibility issues?","url":"https://dealroom.so/for-lenders/questions/what-are-the-common-reasons-for-the-sba-to-deny-a-7-a-loan-application-during-its-review-b"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Eligibility issue","url":"https://dealroom.so/glossary/eligibility-issue","source_type":"DealRoom Data"}}