For SBA lenders
Short answer
Applicants and owners are generally disqualified if they have certain felony convictions, are on probation or parole, or have specific federal debarment or suspension actions, as outlined in SBA policy.
SBA policy specifies criminal justice review criteria that can render an applicant or owner ineligible. This includes felonies involving fraud, dishonesty, or a lack of business integrity, as well as being subject to certain government-wide debarments. Minor offenses or those fully rehabilitated may not be disqualifying, but the lender must confirm this.
A 51% owner discloses a felony conviction for embezzlement from five years ago, for which they are still on parole. The lender must determine this individual ineligible, as they are currently on parole for a disqualifying offense.
SOP 50 10 - Lender and Development Company Loan Programs
SBA Form 1919 - Borrower Information Form
Criminal Justice Reviews for SBA Business Loan Programs - Final Rule
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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