For SBA lenders
Short answer
To demonstrate prudent lending standards regarding industry experience, a lender must document the borrower's resume, prior work history, educational background, and any relevant certifications or training. This documentation supports the assessment of the borrower's capability to operate the business successfully.
SBA requires lenders to apply prudent lending standards, which include evaluating the management capabilities and industry experience of the borrower. Lenders must document their assessment by including the borrower's resume, detailing relevant work history, education, and any specific industry training or certifications. If the borrower lacks direct industry experience, the lender must document how other management experience or advisory support mitigates this risk.
A lender underwrites a 7(a) loan for a borrower acquiring a restaurant. The borrower's resume shows 15 years of successful management experience in various service industries, including 5 years as a regional manager for a restaurant chain. The lender notes this experience in its credit memo, documenting how it meets prudent lending standards for industry management.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
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.
More on prudent lending standards
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day