The Small Business Owner’s Guide to SBA Form 912
While applying for SBA loans, small business owners are sometimes required to fill out Form 912. Serving as a statement of personal history, Form SBA 912 plays a crucial role in determining your eligibility for the loan, irrespective of the SBA loan type you're pursuing. While some lenders require all applicants to complete this form, others only request it if you've indicated a criminal record in other parts of your loan application.
Key Takeaways
- SBA Form 912 is used to evaluate the background of applicants applying for SBA loans.
- All business principals with 20% equity or more must complete the form, providing personal history information and in some cases submitting fingerprints and undergoing a background check.
- The SBA considers criminal records when evaluating loan eligibility, requiring full disclosure and supporting documentation as part of its evaluation process.
The Purpose Of SBA Form 912
SBA Form 912, also known as the Statement of Personal History, is a vital document used by the Small Business Administration (SBA) to evaluate the character of business owners, officers, directors, and loan guarantors applying for SBA loans, such as 504 and 7(a) loans. The form requires applicants to provide detailed personal history information, including any criminal charges, arrests, or other pertinent data.
Who Needs to Complete the Form?
Certain SBA loan providers may require owners to fill out SBA Form 912, but not all do. If you don't know whether it's mandatory, ask your lender. Depending on your business entity, you may have to ask for various stakeholders to individually fill out the form:
- Sole proprietors serving as business owners
- Partners holding a 20% or greater stake in a business partnership
- Investors possessing a 20% or higher ownership in the corporation
- Managing members of an LLC, along with officers, directors, and trustors
- Any individuals co-signing the loan or assuming the role of a loan guarantor
This requirement applies regardless of the person hired to manage the business. The aim is to ensure that all key players in the company have been thoroughly vetted, as their character and creditworthiness can impact the overall success of the business.
Having all key stakeholders complete the form enables the SBA to assess the company’s credit eligibility more effectively and make well-informed decisions about loan extensions. This comprehensive approach helps protect both the SBA and the business applicants, ensuring that loans are granted to those who demonstrate the highest level of integrity and creditworthiness.
How To Avoid Delays
To avoid delays or rejections with this paperwork, make sure to:
- Provide accurate and comprehensive information on the form
- Double-check all the details before submitting
- Include any relevant supporting documents
- Be honest and transparent in your responses
In particular, if you answer “yes” to questions 8 or 9, which relate to criminal offenses, you must provide the additional documentation or risk having your loan postponed or declined. Keep in mind that when filling out SBA Form 912, you do not need to disclose a minor vehicle violation. However, any other criminal history information must be presented. In certain instances, applicants might need to submit fingerprints and undergo a background check to offer a complete view of their criminal history.
Completing SBA Form 912: Step by Step Guide
Personal Information
The first step in completing SBA Form 912 is to first provide details of your personal information, including:
- Your name
- Your address
- Your social security number
- Your citizenship status
- The percentage of the business you own
Ensuring the information you provide is accurate and thorough is vital, as any discrepancies could result in delays or even rejection of your loan application.
If you have used previous names or had previous addresses, make sure to include these as well. Providing a complete picture of your personal history will help the SBA and your lender assess your eligibility for a loan more accurately. Honesty and transparency are key when filling out this form.
Criminal History Questions
The next aspect of SBA Form 912 is answering the criminal history questions, which are questions 8 and 9 on the form. These questions focus on current criminal proceedings, past convictions, and parole/probation status. It’s essential to answer these questions truthfully, even if you believe certain records to be sealed or expunged.
Offering accurate information about your criminal history and any criminal offense enables the SBA to make a well-informed decision on your loan application. Keep in mind that certain convictions or crimes of moral turpitude may be grounds for disqualification, so it’s important to be as transparent as possible on this form.
In some cases, you may be required to provide official court documents, legal notices, or other records related to your criminal offense or personal history. Submitting all relevant documents aids the SBA in making an informed decision on your loan application and showcases your commitment to transparency and honesty.
How Criminal Records Affect SBA Loan Eligibility
A criminal record can have a significant impact on SBA loan program eligibility itself, as the SBA evaluates each applicant’s background individually. While certain convictions or crimes of moral turpitude may result in disqualification, proposed revisions to SBA loan programs aim to relax restrictions for individuals with criminal records by allowing them to provide additional information demonstrating their rehabilitation.
Let’s explore the importance of full disclosure and the SBA’s evaluation process in more detail.
Full And Adequate Disclosure
The importance of full disclosure and providing adequate details about your criminal history cannot be overstated when applying for an SBA loan. Being candid and thorough in your responses builds trust and displays your commitment to transparency.
It’s essential to provide full and adequate details about any criminal history information, charges, arrests, or other pertinent data. Even if a record was sealed or expunged, it’s crucial to disclose this information and explain the circumstances surrounding the event. Failure to provide accurate details can lead to delays or even rejection of your loan application.
SBA's Evaluation Process
The SBA assesses each loan application with criminal records on an individual basis, considering factors such as the nature, frequency, and timing of offenses. Adopting a holistic approach to the evaluation process allows the SBA to make more precise decisions about extending loans to applicants with criminal records.
Additional Requirements: Fingerprints and Background Checks
In addition to the standard SBA Form 912 requirements, applicants with criminal records may need to submit fingerprints and undergo background checks to provide a more comprehensive picture of their personal history.
Let’s delve deeper into when fingerprints are required and the background check process.
When Fingerprints Are Required
Fingerprints may be required for SBA loan applicants who have been prosecuted for misdemeanors or felonies. These additional requirements help the SBA and lenders obtain a more accurate representation of the applicant’s character and creditworthiness, ensuring that loans are granted to those who demonstrate the highest level of integrity.
Complying with these requirements and submitting fingerprints when requested is necessary, as noncompliance could lead to delays or even rejection of your loan application. By working closely with the SBA and providing all necessary information, you increase your chances of securing a loan and supporting your business’s growth.
Background Check Process
The background check process for SBA loan applicants involves verifying the information provided on SBA Form 912 and assessing the applicant’s character and creditworthiness. This process helps ensure that loans are granted to individuals who demonstrate a high level of integrity and responsibility.
During the background check process, the applicant’s information, including their criminal history and personal data, is cross-referenced with the results of the background check. In some cases, lenders may require the submission of fingerprints via an FBI-sanctioned, SBA-contracted channeler to further verify the applicant’s identity.
Summary
In conclusion, understanding and completing SBA Form 912 properly is crucial for a successful loan application. By providing accurate personal information, responding to criminal history questions truthfully, and submitting the necessary documentation, you demonstrate your commitment to transparency and integrity. With this comprehensive guide in hand, you’re well on your way to navigating the SBA loan process with confidence.
Frequently Asked Questions
Is SBA Form 912 required for all business owners?
Based on the requirements of question 18 and 19 of the SBA Form 1353.3, a sole proprietorship will require the completion of Form 912, while partnerships may require completion by all general partners, any limited partner with 20 percent or more equity, and any partner involved in managing the business.
Does the SBA run a background check?
The SBA runs background checks for 7(a) loan applicants, including requesting a consent to fingerprinting in the case of misdemeanors or felonies being prosecuted. This process can take longer to complete.
How does the SBA evaluate loan applications with criminal records?
The SBA evaluates loan applications with criminal records on an individual basis, taking into account factors such as the type, frequency, and timing of offenses to make a determination about eligibility.
Where can I get additional help on SBA loan applications?
Try Hansa’s free SBA loan navigator. Creating an account gives you instant access to the tool. Our SBA loan navigator helps you figure out if you’re eligible, generates business plans and financial projections, and tracks the necessary documents for your application.
