What Could Stop You From Getting an SBA Loan?

When applying for an SBA loan, there are certain criteria that must be met in order to be approved. Learn what could stop you from getting approved for an SBA loan.

What Could Stop You From Getting an SBA Loan?

When applying for a small business loan, one of the most important factors a lender will consider is your business's credit score and credit report. The easiest way to know if your record will prevent you from getting a loan is to have no criminal record. However, there are cases where a conviction won't stop you from getting a loan, so it's worth contacting a lender specialist to discuss your specific situation. The Small Business Administration (SBA) does not have a minimum credit rating requirement, but most lenders prefer an excellent personal credit score (720 FICO or higher).

This shows that the borrower has a long history of timely payments and keeps low balances on credit cards and other revolving loans. A bad credit score (lower than 630) will likely disqualify you. If your loan is denied, you will receive a denial letter from the SBA or the lender. This should detail the type of loan you applied for. Unfortunately, these letters usually don't include the specific reasons why you didn't pass the approval process.

You should contact the lender that denied it and ask for details of your case and why it was denied. The SBA recently released new guidance that eases eligibility restrictions for people with criminal records, one week before the June 30 deadline for filing an application. The SBA is a key resource for small businesses struggling to survive during this pandemic. The SBA will ask you on this form if you were ever charged with a crime, if you were arrested within the past six months, and if the arrest was due to anything other than a minor vehicle violation. In addition to the programs discussed in this publication, this website provides more information about the various SBA benefit programs. For 7(a) loans in general and possibly also for loans with paycheck protection, the SBA conducts a multi-step nature assessment process to determine if the applicant's associates meet the “good character” requirement.

The SBA has a checklist of commercial loan requirements on its website and in the personal information section that states that any conviction may disqualify the borrower from receiving an SBA loan. Even after you've completed the application process, your SBA loan may be disqualified or denied. If you've filed for bankruptcy in the past, it may still be possible to get an SBA loan if you have a good explanation for it, says Rob Wilson, former CEO of C7a, a Maine-based non-bank lender. We'll explain some of the most common reasons why SBA loans are denied, tell you how to avoid them, and what to do if your company continues to be disqualified. The SBA requires that your company and all of its directors demonstrate “good character” and a “personal background statement” is required from each applicant in order for the SBA to make a decision about credit character and eligibility. The SBA has a policy of not granting loans to individuals or businesses whose owner or associate is convicted of crimes of moral turpitude.

You'll have to wait at least 90 days after being disqualified until you can reapply for an SBA loan. I recently came across an interesting question about the personal information required for the Small Business Administration (SBA) loan application process. It's important to understand all of these requirements before applying for an SBA loan so that you can increase your chances of approval. Make sure that all of your documents are up-to-date and accurate before submitting them to the lender. Additionally, make sure that all of your personal information is correct and up-to-date so that there are no surprises when it comes time to apply. If you're considering applying for an SBA loan, make sure that you understand all of the requirements and eligibility criteria before submitting your application.

It's also important to understand what could stop you from getting approved so that you can take steps to avoid any potential issues.