SBA Form 1919 Updated for Criminal Justice Reviews Final Rule
Summary
SBA Information Notice, control no. 5000-857390, effective July 12, 2024, addressed to SBA employees and 7(a) Lenders, announcing an update to SBA Form 1919, the SBA 7(a) Borrower Information Form. It explains that SBA proposed changes to its criminal background review rules on September 15, 2023 (88 FR 63534) and published the final rule, Criminal Justice Reviews for the SBA Business Loan Programs, Disaster Loan Programs, and Surety Bond Guaranty Program, on April 30, 2024 (89 FR 34094), effective May 30, 2024. Under amended 13 CFR 120.110(n), a business is ineligible for a 7(a) loan if an Associate is currently incarcerated, serving a sentence of imprisonment imposed upon adjudication of guilty, or under indictment for a felony or a financial misconduct or false statement crime; the earlier text also covered an Associate on probation or parole.
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Full text
SBA Information Notice
TO: All SBA Employees and 7(a) Lenders CONTROL NO.: 5000-857390
SUBJECT: SBA Form 1919 Updated for Criminal EFFECTIVE: July 12, 2024
Justice Reviews Final Rule
The purpose of this Notice is to announce an update to SBA Form 1919, “SBA 7(a) Borrower
Information Form”.
On September 15, 2023, SBA published a Notice of Proposed Rulemaking (NPRM) in the
Federal Register (88 FR 63534) with a 60-day comment period. The NPRM announced SBA’s
intention to amend SBA’s regulations on the criminal background review of applicants.
On April 30, 2024, Federal Register Notice (89 FR 34094) Criminal Justice Reviews for the
SBA Business Loan Programs, Disaster Loan Programs, and Surety Bond Guaranty Program
(Rule) was published, amending regulations governing SBA’s business loan programs for
criminal background reviews effective May 30, 2024. For the 7(a) Loan Program, the relevant
regulation amended is 13 CFR 120.110(n).
Before the rule change, the language at 13 CFR 120.110(n) stated that a business is ineligible for
a 7(a) loan if the business has an Associate who is incarcerated, on probation, on parole, or is
under indictment for a felony or any crime involving or relating to financial misconduct or a
false statement.
On the effective date of the Rule, 13 CFR 120.110(n) is amended to state that a business is
ineligible for a 7(a) loan if the business has an Associate who is currently incarcerated, serving a
sentence of imprisonment imposed upon adjudication of guilty, or is under indictment for a
felony or any crime involving or relating to financial misconduct or a false statement.
The phrase “serving a sentence of imprisonment imposed upon adjudication of guilty” means a
person is serving a sentence for a crime for which they have been found guilty. It includes people
on house arrest, work release, or similar programs. It does not include a person who is detained
but not yet convicted, such as people in jail pending trial; however, these individuals would be
ineligible if they are under indictment for a felony or any crime involving or relating to financial
misconduct or a false statement.
PAGE 1 of 2 EXPIRES: 7/1/25
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
This Rule only changes SBA’s minimum background check requirements. The Rule revision
does not impact a Lender’s ability to conduct a criminal history background check, following
their own policies, provided they do so in a manner that complies with the Equal Credit
Opportunity Act and other relevant laws and does not result in an unjustified discriminatory
effect on a protected class group. Lenders can continue to deny loans, for example, where
criminal history, when considered along with other information, presents an unacceptable credit
risk.
As a result of the Rule, question 4 on SBA Form 1919, regarding the prior criminal history of the
Applicant or an Associate of the Applicant has been revised to state, “Is the Applicant or any
Associate of the Applicant currently incarcerated, serving a sentence of imprisonment imposed
upon adjudication of guilty, or is under indictment for a felony or any crime involving or relating
to financial misconduct or a false statement? (if “Yes” the Applicant is not eligible for SBA
financial assistance.)”.
Any business that checks “yes” to question 4 is ineligible. Because this is a regulatory
requirement, there is no opportunity for a request for a waiver or exception to policy.
SBA also added a borrower certification to page 4 that authorizes SBA to release information
about existing SBA loans to the Lender processing the loan application to assist with compliance
check codes.
The new expiration date for the form is June 30, 2027.
Lenders may download the revised SBA Form 1919 from SBA’s website. The revised form may
be used immediately; however, SBA will allow a 30-day grace period for 7(a) Lenders to begin
using the revised form.
Questions
Questions concerning this Notice may be directed to the Lender Relations Specialist in the local
SBA Field Office.
Kathryn Frost
Associate Administrator
Office of Capital Access
PAGE 2 of 2 EXPIRES: 7/1/25
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
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- Original
- www.sba.gov