On April 30, SBA published a Final Rule on Criminal Justice Reviews for the SBA Business Loan Programs, Disaster Loan Programs, and Surety Bond Guaranty Program [89 FR 34094]. The Final Rule, among other things, amends 13 CFR 120.110(n), What businesses are ineligible for SBA business loans?, to remove the prohibition that had previously barred a business with an associate who is on parole or probation from eligibility for a 7(a) or 504 loan. Under the final rule any business with an associate who is currently incarcerate or under indictment for a felony or any crime involving or relating to financial misconduct or a false statement remains ineligible for an SBA loan. This represents a change from the Proposed Rule which would have allowed loan eligibility for businesses with associates who were under indictment for the specified crimes.
The changes in the Final Rule takes effect on May 30, 2024. Please refer to the Final Rule for additional information regarding the regulatory amendments.
[Note: SBA has advised that it will amend SBA Form 1919, Borrower Information Form (page 2, question 4) to reflect the new regulatory requirements. NAGGL will publish additional information on implementation of the Final Rule and the form change as it becomes available from SBA.]
