SBA loan basics
Short answer
A prior felony conviction can impact eligibility for an SBA 7(a) loan, but it does not automatically disqualify you. The SBA reviews specific criminal history to assess eligibility.
The SBA requires applicants to disclose any criminal history. Certain types of offenses, especially those involving fraud, dishonesty, or a felony committed while on probation/parole, can lead to ineligibility. However, a single felony conviction, if not recent and not involving fraud, may be overcome. The SBA conducts a criminal justice review based on specific criteria.
If a business owner had a felony conviction 15 years ago for a non-financial crime and has maintained a clean record since, they might still be eligible after a review. However, if an owner was convicted of bank fraud two years ago, they would likely be deemed ineligible due to the nature and recency of the offense.
Insider move
Lenders collect detailed information on any criminal history from SBA Form 1919 and submit it to the SBA for review. They are concerned with the recency, severity, and nature of the offense, and how it reflects on the applicant's character and trustworthiness.
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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