Glossary · People and paperwork
Material misrepresentation
In short
Providing false or misleading information that significantly influences a lender's decision to approve a loan. This is a serious offense that can lead to loan acceleration and legal action.
What it means in a deal
During your loan application, any false statement or omission of crucial facts that would have changed the lender's underwriting decision constitutes material misrepresentation. This can result in your loan being called due, the SBA denying its guaranty, and potential borrower fraud charges. Be honest and accurate.
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 Material misrepresentation
- What constitutes a "material misrepresentation" by a borrower that could lead to a 7(a) guaranty denial?
- What constitutes a "material misrepresentation" by a borrower that could lead to an outright 7(a) guaranty denial?
- What are the consequences if SBA Form 1919 contains material omissions or misrepresentations?
- Can a lender approve a material change to collateral without prior SBA approval?
- What constitutes a 'material adverse change' that could affect my loan approval after application?
- Which material servicing actions can a 7(a) lender take without prior SBA 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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