Glossary · Reading the business
Derogatory mark
In short
A derogatory mark is a negative entry on your credit report, like a late payment or bankruptcy. It signals to lenders that you may be a higher credit risk.
What it means in a deal
Derogatory marks on your personal credit report, such as bankruptcies, foreclosures, or significant late payments, will be closely scrutinized during the SBA 7(a) loan underwriting process. You'll need to explain these issues and demonstrate that they won't impact your ability to repay the new business loan.
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 Derogatory mark
- Can personal marketable securities (stocks/bonds) be used as collateral if business assets are insufficient?
- Can pledged marketable securities, like stocks, serve as additional collateral for an SBA 7(a) loan?
- What criteria justify a lender waiving a lien on readily marketable personal assets from a guarantor?
- When can a lender waive the requirement for a lien on readily marketable personal assets of a guarantor?
- Are marketing and advertising expenses allowed uses for 7(a) loan funds?
- Can working capital funds be used for post-acquisition marketing and advertising campaigns?
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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