Glossary · People and paperwork
In short
This refers to dishonest or unethical financial conduct, like fraud, embezzlement, or misrepresentation, which can disqualify a borrower or business from an SBA loan. It indicates a lack of good character.
The SBA requires all owners of 20% or more to have "good character." Any past financial impropriety by you, the seller, or the business itself can halt a 7(a) loan. Thoroughly vet the seller's and business's financial history during due diligence, including IRS transcripts.
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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