Glossary · People and paperwork
Omission of Material Fact
In short
This means intentionally failing to disclose important information that would influence a decision, like a loan approval. Buyers care because it's considered fraud by the SBA and can lead to severe penalties, including loan denial or revocation.
What it means in a deal
The SBA takes nondisclosure seriously. If you or the seller intentionally leave out crucial details on loan applications or financial statements, it can invalidate your loan guaranty or lead to accusations of fraud. Always ensure all information provided to the lender is complete and accurate.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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 Omission of Material Fact
- What is the impact of an unapproved material servicing action on the SBA's 7(a) loan guaranty?
- What constitutes a "material default" by a 7(a) lender that would lead to an outright denial of a guaranty purchase request?
- 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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