Glossary · People and paperwork
Disqualified Person
In short
This refers to individuals with certain past issues, like federal loan defaults, felonies, or fraud, that prevent them from getting an SBA loan. The SBA checks all key principals.
What it means in a deal
All owners of 20% or more, officers, directors, and managing members must complete SBA Form 1919 and undergo a character check. If you, or anyone else involved, is deemed a disqualified person, the loan cannot proceed.
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 Disqualified Person
- Are some business activities or industries automatically disqualified from SBA 7(a) loan eligibility?
- Who should a business identify and insure as a key person?
- How does business overhead expense insurance differ from key-person life insurance?
- What is the typical amount of key-person life insurance coverage needed?
- How is the ideal coverage amount for key-person life insurance typically calculated?
- Should a business choose term or permanent life insurance for key person protection?
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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