SBA loan basics
Short answer
A past criminal record does not automatically disqualify an applicant, but it will be reviewed by the SBA. Recent serious offenses, especially those involving fraud or a felony while incarcerated, are typically disqualifying.
The SBA reviews the criminal history of all principals. Certain recent offenses, such as felonies while incarcerated, or crimes involving fraud, dishonesty, or misrepresentation, can lead to ineligibility. However, older, less severe offenses, or those with successful rehabilitation, may not be disqualifying, depending on a case-by-case review.
An applicant with a felony conviction from 25 years ago, for which they served their time and have since maintained a clean record and stable employment, might still be eligible. However, an applicant released from prison for felony fraud three years ago would likely be deemed ineligible due to the recency and nature of the crime.
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.
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