SBA loan basics
Short answer
It depends, but certain criminal records, especially serious ones or those involving financial misconduct, can prevent you from getting an SBA 7(a) loan.
The SBA reviews the criminal history of all principals and key individuals involved in the business. Felony convictions, particularly those within the last five years or involving fraud, dishonesty, or a breach of trust, can lead to automatic ineligibility. Misdemeanors are reviewed on a case-by-case basis. The intent is to ensure the integrity of the program and protect taxpayer funds.
An applicant with a felony conviction for embezzlement five years ago would likely be ineligible. However, someone with a minor misdemeanor from ten years ago, unrelated to financial fraud, might still be considered if they otherwise meet all eligibility criteria.
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 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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.
More on who qualifies
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