Glossary · People and paperwork
Federal debarment(Debarred from federal programs)
In short
Federal debarment means you're banned from doing business with the government. If the seller or business is debarred, your SBA loan won't close, as it's a federal program.
What it means in a deal
The SBA checks if you, the seller, or the business itself are debarred from any federal program. This is a red flag for the SBA because it means a past serious infraction, like fraud. Your lender will run checks, and if debarment is found, the deal stops.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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 Federal debarment
- What if a business applicant has outstanding federal tax liens or delinquencies?
- What if a borrower has outstanding judgments or liens from non-federal entities?
- What happens if a borrower has outstanding judgments or liens from non-federal entities?
- What happens if a business has outstanding federal taxes when applying for an SBA loan?
- Can a business owner with delinquent federal debt still be eligible for a 7(a) loan?
- Will a past federal student loan default, now rehabilitated, affect my SBA 7(a) loan approval?
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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