Can you get an SBA loan with a criminal record?
Short answer
Possibly. A business is ineligible if an Associate is incarcerated or serving a sentence of imprisonment. The same applies if an Associate is under indictment for a felony, financial misconduct or a false statement. Past convictions are not automatically disqualifying. Source: 13 CFR § 120.110(n).
Possibly. 13 CFR § 120.110(n) and SOP 50 10 8.1, Sec. A, Ch. 1, Para. E look at current status. A business is ineligible if an Associate is:
- Currently incarcerated.
- Serving a sentence of imprisonment imposed upon adjudication of guilty.
- Under indictment for a felony or any crime involving or relating to financial misconduct or a false statement.
Where this shows up
Form 1919, question 4, asks this about the applicant and any Associate. A yes means the applicant is not eligible. On a 504 loan, a yes by any Associate on Form 1244 has the same result (Sec. C, Ch. 1, Para. F).
Recent convictions
Form 1919 also asks you to certify about recent convictions. It covers convictions and civil judgments in the last three years for offenses in SBA's debarment regulations. It covers you and any Associate. If you cannot certify, you need a written statement of exception from SBA.
How your history is reviewed
SBA may verify criminal history under 15 U.S.C. § 636(a)(1)(B). Form 912 says SBA considers a person's integrity, candor and disposition toward criminal actions. Lender policies vary.
Answer truthfully
Form 1919 warns that a knowing false statement is a federal crime. Penalties under 18 U.S.C. §§ 1001 and 3571 include up to five years in prison, a fine of up to $250,000, or both.
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