Glossary · People and paperwork
Probation
In short
A court-ordered period of supervision after a criminal conviction, allowing an individual to avoid incarceration if they meet certain conditions. It's a red flag for SBA loan eligibility.
What it means in a deal
If you, or any key principal, are currently on probation for a felony or a crime involving fraud, embezzlement, or breach of trust, you are generally ineligible for an SBA loan. The SBA assesses character, and an active probation indicates a current legal issue. Ensure all key principals disclose any such history upfront to avoid surprises.
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 Probation
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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