SBA loan basics
Short answer
It depends on the nature and recency of the criminal record. Certain serious offenses can disqualify an applicant, but not all past criminal records are automatic disqualifiers.
The SBA requires applicants and principals (owners of 20% or more) to disclose any criminal history. Felony convictions or certain crimes of moral turpitude within specific look-back periods (e.g., one year for misdemeanors, five years for felonies for certain categories) may lead to ineligibility. Each case is reviewed individually by the SBA to assess the risk and impact on the loan.
An owner with a misdemeanor conviction for a minor traffic offense from seven years ago would likely not be disqualified. However, an owner with a recent felony conviction for fraud within the last five years would likely be deemed ineligible.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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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