Glossary · Reading the business
Bankruptcy
In short
Bankruptcy is a legal process for individuals or businesses unable to repay their debts. For a buyer, recent personal bankruptcy can severely impact your eligibility for an SBA loan, making funding difficult or impossible.
What it means in a deal
The SBA requires you to disclose any bankruptcy filings on Form 1919. If you've had a personal bankruptcy in the last 10 years, especially if it resulted in a loss to the government, it's a major red flag and usually disqualifies you. Be completely upfront about any past filings.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
SBA Form 1919 — Borrower Information Form
U.S. Small Business Administration · SBA form
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Bankruptcy
- What if I have declared personal bankruptcy in the past?
- How does a prior personal bankruptcy impact SBA 7(a) loan eligibility?
- Can a past bankruptcy prevent me from getting an SBA 7(a) loan?
- Does a past bankruptcy prevent me from getting an SBA 7(a) loan?
- How does having a past personal bankruptcy that has been discharged affect my eligibility?
- Can a business with a recent bankruptcy still get an SBA 7(a) loan?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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