SBA loan basics
Short answer
Not automatically, but certain criminal records, especially felonies, can disqualify you. The SBA reviews these on a case-by-case basis based on severity and recency.
The SBA conducts a character review for all principals of the applicant business. Certain felony convictions, especially those involving fraud or a breach of trust, or if you are currently incarcerated, on probation, parole, or subject to an indictment, can lead to disqualification. Other past offenses might require additional review and explanation, but do not automatically preclude eligibility. The SBA's policies have evolved to be more inclusive regarding certain past criminal justice involvement.
An applicant discloses a misdemeanor conviction from 15 years ago for a minor offense. This would likely not disqualify them, but a recent felony conviction for embezzlement would likely make them ineligible.
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.
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