Glossary · People and paperwork
Deferred prosecution agreement
In short
An agreement where a prosecutor agrees to drop charges after a period if an individual or company meets certain conditions. For SBA loan applicants, this can raise character eligibility concerns.
What it means in a deal
The SBA requires all owners of 20% or more to disclose any criminal history, including deferred prosecution agreements, on Form 1919. While not an automatic disqualifier, the SBA will review the nature of the offense and compliance with the agreement. Be prepared to provide full details and documentation to your lender.
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 Deferred prosecution agreement
- What if the business I'm buying has existing deferred revenue or unearned income?
- Can a partial equity injection come from a deferred management bonus from my current employer?
- How does a lender underwrite a business acquisition with existing deferred revenue or unearned income?
- How does a lender assess deferred maintenance or capital expenditure needs of an acquired business?
- Can a seller note with deferred payments but no interest count as full standby for equity injection?
- What specific conditions allow a seller note with deferred principal payments but immediate interest to qualify as full standby?
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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