SBA loan basics
Short answer
Certain types of criminal history, specifically felony convictions, especially those involving financial impropriety or fraud, can make an applicant ineligible for an SBA 7(a) loan.
The SBA requires applicants to disclose criminal history on Form 1919. A felony conviction, particularly within the last five years, or any felony conviction involving fraud, dishonesty, or a breach of trust, may render an applicant ineligible. The SBA reviews these on a case-by-case basis.
An applicant with a felony conviction for embezzlement five years ago would likely be ineligible. However, an applicant with a minor misdemeanor from ten years ago, unrelated to financial crimes, might still qualify.
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 eligibility & background
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