{"ok":true,"canonical_url":"https://dealroom.so/sba-loans/basics/what-if-the-business-i-want-to-buy-has-a-history-of-unfiled-taxes","api_url":"https://dealroom.so/api/public/questions/what-if-the-business-i-want-to-buy-has-a-history-of-unfiled-taxes","question":"What if the business I want to buy has a history of unfiled taxes?","topic":"Eligibility - Business Issues","audience":"new","bot_mode":"buyer","short_answer":"A history of unfiled or unpaid taxes generally makes a business ineligible for an SBA 7(a) loan. All federal, state, and local taxes must be current or have a satisfactory repayment plan in place.","rule":"SBA policy requires that borrowers and their businesses be current on all federal, state, and local tax obligations. A history of unfiled or unpaid taxes indicates a lack of financial responsibility and may lead to automatic disqualification. If there's an outstanding tax issue, a satisfactory repayment agreement with the taxing authority must be in place and current for the loan to proceed.","example":"During due diligence for a $600,000 business acquisition, the buyer discovers the seller has not filed state sales tax returns for the past two years. The lender would immediately pause the application, requiring the seller to resolve this or provide proof of an active, current repayment plan before the loan could be approved.","what_lenders_check":"Lenders view unfiled or unpaid taxes as a significant red flag, indicating poor financial management and potential undisclosed liabilities. This raises concerns about the business's overall health and the borrower's ability to manage finances responsibly. Tax liens also affect collateral priority.","required_facts":["Must be current on taxes","Unfiled taxes disqualify","Repayment plan needed","Financial responsibility"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","SBA Form 1919 - Borrower Information Form"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"},{"title":"SBA Form 1919 - Borrower Information Form","url":"https://www.sba.gov/sites/default/files/2025-03/2025.02.27%20Form%201919%20-%20Updates%20%28FINAL%29_03-12-2025%20%281%29.pdf"}],"related_questions":[],"related_terms":[{"term":"Business credit history","url":"https://dealroom.so/glossary/business-credit-history"},{"term":"Repair to the guaranty","url":"https://dealroom.so/glossary/repair-to-the-guaranty"},{"term":"Alienate the Business","url":"https://dealroom.so/glossary/alienate-the-business"},{"term":"Statement of Personal History","url":"https://dealroom.so/glossary/statement-of-personal-history"},{"term":"Buy-Sell Agreement","url":"https://dealroom.so/glossary/buy-sell-agreement"},{"term":"Payroll Taxes","url":"https://dealroom.so/glossary/payroll-taxes"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-loans/basics/what-if-the-business-i-want-to-buy-has-a-history-of-unfiled-taxes","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}