Glossary · Reading the business
In short
Discharge is the legal release from debt obligations, typically granted in a bankruptcy proceeding. While it clears old debts, a recent discharge from bankruptcy will still be scrutinized by SBA lenders and can affect your loan eligibility.
A bankruptcy discharge doesn't erase the fact of the bankruptcy from your credit history, which lenders will see. If the discharge was recent, or if the bankruptcy involved fraud or significant government losses, your SBA loan application will likely be rejected due to character concerns.
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
SBA Form 1919 — Borrower Information Form
U.S. Small Business Administration · SBA form
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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