Glossary · Doing the deal
Discharged
In short
In bankruptcy, "discharged" means a court has legally released you from most debts. It's important for buyers because a discharged bankruptcy shows you've completed the process, which is better than an ongoing one.
What it means in a deal
If you have a past bankruptcy, lenders prefer it to be fully discharged, meaning the legal process is complete and the debts are resolved. An undischarged or ongoing bankruptcy is typically an automatic disqualifier for an SBA 7(a) loan. Provide all relevant 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 Discharged
- How does having a past personal bankruptcy that has been discharged affect my eligibility?
- What if an applicant business owner has a recent felony conviction that has been discharged?
- 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?
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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