13 C.F.R. § 120.150
What are SBA's lending criteria?
The applicant (including an Operating Company) must be creditworthy. Loans must be so sound as to reasonably assure repayment. Lenders and CDCs must use appropriate and prudent generally acceptable commercial credit analysis processes and procedures consistent with those used for their similarly-sized, non-SBA guaranteed commercial loans. Lenders, CDCs, and SBA may use a business credit scoring model. When approving direct or guaranteed loans, Lenders, CDCs, and SBA may consider (as applicable) the following criteria: credit score or credit history of the applicant (and the Operating Company, if applicable), its Associates and any guarantors; the earnings or cashflow of applicant; or where applicable any equity or collateral of the applicant.
Notes of Decisions
Cited in 13
cases (5 in the last 5 years), 1997–2023 · leading case: U.S. Fed. Credit Union v. Gateway Radiology Consultants, P.A., 983 F.3d 1239 (11th Cir. 2020).
U.S. Fed. Credit Union v. Gateway Radiology Consultants, P.A., 983 F.3d 1239 (11th Cir. 2020). “” 13 C.F.R. § 120.150 . The soundness and repayment criteria include nine factors that the “SBA will consider,” including the “[c]haracter, reputation, and credit history of the applicant,” the “[s]trength of the business,” and the “[a]bility to repay the loan with earnings from…”
Springfield Hosp., Inc., Springfield Med. Care Sys., Inc. v. Guzman, 28 F.4th 403 (2d Cir. 2022). “10 normal Section 7(a) criteria under 13 C.F.R. § 120.150 ); see also Business Loan Program Temporary Changes; Paycheck Protection Program—Additional Eligibility Criteria and Requirements for Certain Pledges of Loans, 85 Fed.”
Kwiatkowski v. Polish & Slavic Fed. Credit Union, 511 F. App'x 117 (2d Cir. 2013). “§ 271 (b); (3) use of illegal lending standards pursuant to 13 C.F.R. § 120.150 (h) and 12 C.F.R. § 528.”
A.B. & S. Auto Serv., Inc. v. South Shore Bank of Chicago, 962 F. Supp. 1056 (N.D. Ill. 1997). “” 13 C.F.R. § 120.150 . As a participant in the SBA loan guarantee program, South Shore Bank is obligated to consider an applicant’s criminal record provided on SBA Form 912 in its evaluation of a loan applicant’s character.”
Gateway Radiology Consultants P.A. v. Carranza, in Her Capacity as Admin fo the U.S. Sma (Bankr. M.D. Fla. 2020). “150 : the applicant’s character, reputation, and credit history; the experience and depth of management; the strength of the business; past earnings, projected cash flow, and future prospects; the ability to repay the loan with business earnings; whether the business has…”
Penobscot Valley Hosp. v. Carranza, in her capacity as Adm'r for the (Bankr. D. Me. 2021). “13 C.F.R. § 120.150 . For Section 7(a) loans, the SBA also considers an applicant’s bankruptcy history; applicants are asked to disclose prior bankruptcy filings on Form 1919, the loan application form.”
Calais Reg'l Hosp. v. Carranza, in her capacity as Adm'r for the (Bankr. D. Me. 2021). “13 C.F.R. § 120.150 . For Section 7(a) loans, the SBA also considers an applicant’s bankruptcy history; applicants are asked to disclose prior bankruptcy filings on Form 1919, the loan application form.”
United States Small Bus. Admin. v. Alaska Urological Inst., P.C. (D. Alaska 2020). “Specifically, the Miller Declaration explains that the SBA decided to exclude debtors in bankruptcy because a case-by-case inquiry into the state of their proceedings and the necessary court orders would delay disbursement of funds 123 13 C.F.R. 120.150’s criteria include: “(a)…”
Tradeways, Ltd v. The United States Dep't of the Treasury (D. Maryland 2020). “at 20,812 (excusing lenders issuing PPP loans from the underwiring requirements contained in 13 C.F.R. § 120.150 ); see also id. at 20,815 (delineating lenders’ obligations under the PPP).”
Carmen's Corner Store v. Small Bus. Admin. (D. Maryland 2020). “13 C.F.R. § 120.150 (a). Therefore, businesses with associates “[c]urrently subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction” are also ineligible for financial assistance.”
Defy Ventures, Inc. v. United States Small Bus. Admin. (D. Maryland 2020). “13 C.F.R. § 120.150 (a). Therefore, businesses with associates “[c]urrently subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction” are also ineligible for financial assistance.”
Savage v. United States Small Bus. Admin. (D.R.I. 2021). “Under these rules for the PPP, implemented on April 2, 2020, the SBA relaxed the loan eligibility requirements by not requiring PPP lenders to perform the detailed creditworthiness test for loan applications as set forth in 13 C.F.R. § 120.150 . Lenders would instead “rely on…”
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