For SBA lenders
Short answer
The certifications on SBA Form 1920 (now largely integrated into E-Tran) regarding "Credit Elsewhere" affirm that the borrower is unable to obtain credit on reasonable terms without the SBA guaranty.
A core principle of the SBA 7(a) program is that it acts as a 'lender of last resort.' Lenders must certify that they, along with other lenders, would not extend credit on reasonable terms without the SBA guaranty. This 'Credit Elsewhere' test is a critical aspect of borrower eligibility and is reflected in the lender's certifications within the E-Tran system.
A lender processes a 7(a) loan application. Before submission, the credit analyst notes that the borrower's debt service coverage ratio is below the bank's conventional threshold without the SBA guaranty. In E-Tran, the loan officer certifies that the borrower could not obtain financing on reasonable terms without the SBA guaranty, documenting the conventional decline.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
SBA Document Search
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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