Glossary · People and paperwork
Disqualifying Conviction
In short
A serious criminal conviction that makes you ineligible for an SBA loan. The SBA checks the background of all owners, so this matters for every key principal.
What it means in a deal
If you or any 20%+ owner has certain felony convictions, especially those involving financial fraud or a crime of moral turpitude within the last two years, the SBA will deny the loan. Be upfront with your lender about any past issues; they'll find out during the credit check and Form 1919 review.
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 Disqualifying Conviction
- What constitutes "passive income" disqualifying a business from 7(a) loan eligibility?
- What specific types of prior criminal offenses are generally disqualifying for an SBA 7(a) loan?
- What specific types of criminal offenses are generally disqualifying for an SBA 7(a) loan applicant or owner?
- What if I have a prior felony conviction on my record?
- Will a felony conviction prevent me from getting an SBA 7(a) loan?
- Will a past criminal conviction prevent me from getting an SBA 7(a) 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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