# Can a bank, finance company or factoring company get an SBA loan?

**Short answer:** No. SBA cannot guarantee a loan to a business primarily engaged in lending or investment. Banks, finance companies, factoring companies, investment companies and bail bond companies are all barred. Source: 13 CFR § 120.110(b); SOP 50 10 8.1, Sec. A, Ch. 1, Para. E.2.

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Last checked: 2026-11-09

No. 13 CFR § 120.110(b) makes financial businesses primarily engaged in lending ineligible. SOP 50 10 8.1, Sec. A, Ch. 1, Para. E.2 names the group:

- Banks.
- Life insurance companies, though not independent agents.
- Finance companies.
- Factoring companies.
- Investment companies.
- Bail bond companies.
- Other businesses whose stock in trade is money.

## Operating businesses with a financing arm

The ban also reaches an otherwise eligible business engaged in financing, factoring or investment not related or essential to the business. A retailer that also makes unrelated loans should expect questions.

A business that finances its own credit sales is treated differently. It is eligible if less than 50% of its revenue comes from financing its sales (Para. E.2.b). A dealer with in-house payment plans is one example.

## Disclosure

Form 1919, question 7, asks whether any of your revenue comes from lending activities. A yes requires a separate attachment with details.

## Limited exceptions

Some financial businesses can qualify under the limited circumstances in Para. E.2.b. They include pawn shops, check cashers, certain mortgage companies and fee-based financial advisors. Each has its own test.

## Sources

- [13 CFR § 120.110(b)](https://www.ecfr.gov/current/title-13/section-120.110)
- [SOP 50 10 8.1, Sec. A, Ch. 1, Para. E.2 (p. 18)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SBA Form 1919 (02/2025)](https://legacy.sba.gov/document/sba-form-1919-borrower-information-form)