Glossary · People and paperwork
Bankruptcy discharge
In short
A court order that releases a debtor from personal liability for most debts included in a bankruptcy filing. It's a critical factor for your eligibility as an SBA loan borrower.
What it means in a deal
If you've had a bankruptcy, the lender will need to see proof of discharge, typically a court document, to ensure the bankruptcy is fully resolved. A recent discharge or ongoing bankruptcy can complicate or prevent SBA loan approval, as it impacts your creditworthiness and ability to repay.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Bankruptcy discharge
- How does having a past personal bankruptcy that has been discharged affect my eligibility?
- How does a prior personal bankruptcy, now discharged, impact my SBA 7(a) loan application?
- Will a past bankruptcy (e.g., Chapter 7 discharged 5 years ago) automatically disqualify me from an SBA 7(a) loan?
- How does a personal bankruptcy from five years ago, now discharged, impact my eligibility for an SBA 7(a) acquisition loan?
- What if I have declared personal bankruptcy in the past?
- How does a prior personal bankruptcy impact SBA 7(a) loan eligibility?
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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