SBA Form 912: Recent Changes


May 10, 2013

By Karen McHugh

KarenMcHugh101612(New form available in the Resources Library on our website at

As part of the eligibility determination, the lender is required to acquire information regarding the “character” of individuals owning and operating a small business with SBA financing. Every proprietor, general partner, officer, director, managing member of a LLC, owner of 20% or more of the equity of the applicant business, and any person hired to manage day-to-day operations must execute the SBA Form 912, Personal History Statement (or SBA Form 1919 for Express loan programs). This form must be completed within 90 days of submission of the application to SBA.

There are three key questions that determine next steps in the process. These three questions are “criminal background” questions. If they are all answered “NO,” normal processing of the loan may proceed. However, if one or more of the questions are answered “YES,” then there possibly could be a hard stop (not eligible), or there would be a need for the individual to go through a background check and further character determination, which could slow down processing considerably.

Before last week (4/30/13), the questions were:

1) Are you presently under indictment, on parole or probation? (If answered “YES,” the loan application is not eligible for SBA financing.)
2) Have you ever been charged with and/or arrested for any criminal offense other than a minor motor vehicle violation?
3) Have you ever been convicted, placed on pretrial diversion, or placed on any form of probation, including adjudication withheld pending probation, for any criminal offense other than a minor vehicle violation?

Effective immediately, a new Form 912 is available and required. The questions are now stated as:

1) Are you presently subject to an indictment, criminal information, arraignment or other means by which formal charges are brought in any jurisdiction? (If answered “YES,” the loan application is still not eligible for SBA financing.)
2) Have you been arrested in the past six months for any criminal offense?
3) For any criminal offense, other than a minor vehicle violation, have you ever: (1) been convicted, (2) plead guilty, (3) plead nolo contendere, (4) been placed on pretrial diversion, or (5) been placed on any form of parole or probation (including probation before judgment)?

Presently all SBA Form 912s with affirmative answered questions must receive clearance by a SBA District Office, which includes a background check, possibly fingerprinting, and further clearance by the Office of Inspector General. This can take a considerable amount of time (what we call falling into the big black hole) depending on the circumstance and timing of the application when it lands at a SBA office.

SBA is working on a process that will become available soon that will allow all lenders to “clear” affirmatively answered Form 912s on their own if the past criminal violation was “remote in time” or “minor in nature,” very similar to the authority lenders have presently under SBA Express processes. Once this is implemented (hopefully with the next issuance of the SOP 50 10 5 before the end of the fiscal year in September), it will speed up the process considerably.

But in the meantime, be aware of a brand new form. It is available in the Resources Library on our website at

SBA rules and regulations can appear convoluted and confusing at times. Think of us as your “go to” team for whatever needs you may have in the SBA lending world. We provide assistance at every SBA touch point from loan structuring to loan liquidation. To learn more about the all-inclusive SBA lending services of SBA Complete, go to or call us at 800-801-2378.