SBA Issues Final Rule on Criminal History Reviews

May 1, 2024

Delaney Sexton
Contributing Editor

SBA Issues Final Rule on Criminal History Reviews

Effective May 30, 2024, SBA’s final rule reduces barriers for entrepreneurs with certain criminal history records. They are updating the 7(a), 504, Microloan, ILP, Surety Bond Guarantee Program, and Disaster Loan Program regulations requiring criminal background reviews. Specifically, they revised eligibility.

SBA removed restrictions on businesses with an associate who is on probation or parole for the 7(a) and 504 programs. For disaster loan programs, SBA removed restrictions regarding principal owners of damaged property who are on probation or parole following conviction for a serious criminal offense.

SBA did not remove or make changes regarding ineligibility due to prior default and loss to the Federal Government.

This final rule was issued to ensure equity and expand economic opportunities for those with criminal history records:

“These changes create the opportunity for formerly incarcerated individuals to participate in SBA’s loan and surety bond programs and engage in entrepreneurial endeavors that research shows statistically decrease recidivism based on employment and continued engagement within their communities, thereby strengthening public safety.”

Source:
Final Rule