October 11, 2013
As we all are aware now, SBA just recently released the newest version of the SOP 50 10 5 (F), effective January 1, 2014. Even though the new rules don’t become effective for another few months, now is the time to review, interpret, and commit them to memory. If you take the time to compare the existing SOP rules on how to analyze and document “character issues” for principals of the small business applicant with the newly revised rules, you will notice subtle (but important) differences. Here we will summarize revised and/or clarified Form 912 procedures as reflected in the new SOP.
SBA cannot provide financial assistance to businesses with Associates who are incarcerated, on probation, on parole, who are currently under indictment for a felony or a crime of moral turpitude, or who are presently subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction.
To determine eligibility, SBA requires that every proprietor, general partner, officer, director, LLC managing member, anyone with 20% or more equity of the applicant, Trustor, and any person responsible for day-‐to-‐day management of the business be of “good character.” Part of the character evaluation process involves answering the applicable questions on SBA Form 1919, Borrower Information Form.