For SBA lenders
Short answer
Lenders assess 'good character' by reviewing criminal history, financial history, and other relevant background information for all principals. SBA Form 1919 and 912 gather necessary information for this determination.
SBA requires lenders to determine that principals of the applicant business possess 'good character.' This involves reviewing felony convictions, recent parole/probation status, prior defaults on federal debt, and other factors that may indicate a lack of business integrity or trustworthiness. The SBA Form 1919 requires certifications regarding criminal background.
A lender reviews the SBA Form 1919 for a loan applicant. If a principal discloses a misdemeanor conviction from five years ago, the lender must assess if it impacts their character relative to the business and loan, considering the nature and recency of the offense.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
SBA Form 1919 - Borrower Information Form
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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