SBA Form 912, the Statement of Personal History, is used to determine a borrower’s trustworthiness and evaluate whether applicant’s or their business partners have any criminal history. The information gathered by Form 912 helps the SBA determine if borrowers are of “good character.” Completing the form accurately and in detail will help prevent delays or denials.
Handling all of the SBA loan documentation yourself can be a nightmare. If you have a credit score above 680 (check here for free), have been in business for 2+ years, are profitable, and looking to borrow up to $5 million, you may qualify for a streamlined SBA loan with SmartBiz. They can prequalify you in minutes and get you funded in as quick as 30 days.
More SBA application forms:
- SBA Form 1919 Borrower Information Form
- SBA Form 159 Fee Disclosure Form & Compensation Agreement
- SBA Form 413 Personal Financial Statement
Who Completes SBA Form 912
One of the eligibility requirements to qualify for an SBA loan is that you and your business partners meet the SBA’s definition of “good character.” This is based on the SBA’s assessment of your behavior, integrity, candor, and all past criminal records. Form 912 dives into the criminal history portion of this assessment, and it must be filled out by all “principals” of the business, which includes:
Business Owners: Every owner with 20% or more equity
Officers and Directors: Any company officers, directors, managing LLC members, trustors, or any person hired by the applicant to manage day-to-day operations of the business
Loan Guarantors: Any guarantor of the SBA loan you’re applying for
Form 912 need to be filled out no matter what type of SBA loan you’re applying for, from SBA express loans to SBA 504 loans. To learn more about the entire SBA loan application process, read our full step-by-step guide on How To Apply For An SBA Loan.
How to Complete SBA Form 912, Statement of Personal History
SBA Form 912 is fairly short and requires basic personal identification information. The most significant portion of the form requires three main questions related to the applicant’s criminal history:
- Legal Grievances Outstanding: Are you presently subject to an indictment, criminal information, arraignment, or other means by which criminal charges are brought?
- History of Criminal Charges: Have you been arrested for any criminal offense other than a minor motor vehicle violation?
- Previous Probation or Judgment: For any criminal offense other than a minor vehicle violation, have you ever been convicted, plead guilty, plead no lo contendere (no contest), been placed on pretrial diversion, or placed on any form of parole or probation, including probation before judgement?
It is important to note that you must answer these questions truthfully even if your record was sealed, expunged, or is otherwise unavailable. The information you provide may be verified with a background check.
As SBA Form 912 clearly indicates, a criminal record will not necessarily disqualify you from getting an SBA loan, but an untruthful answer will cause your loan application to be denied and subject you to other penalties. For example, when you sign this form you’re agreeing that all information is correct to the best of your knowledge, and agree to face potential criminal charges if you’re lying or purposefully withholding information.
If your answer to these three questions is “no,” simply check off the appropriate boxes and make sure to fill out all the required personal identification information. This is the ideal application scenario, and will make for the fastest funding timeline.
If, on the other hand, you have to answer “yes” to any of these questions, SBA Form 912 Statement of Personal History is slightly more complicated. The rest of this article will guide you through what you need to do if you answer “yes” to any of these questions.
SBA Form 912 Question 7
Unfortunately, if you or any other principal answers “yes” to question 7, you are ineligible for an SBA loan. The SBA will not give loans to businesses whose principals are currently indicted, incarcerated, on probation or parole, or a defendant in a criminal proceeding.
The reason for this is that there’s a chance that such individuals will go to prison, which would make it exceedingly difficult for them to run the business and pay back the loan. You must wait until you are no longer subject to any criminal proceedings, or are no longer under parole or on probation before you can successfully apply for an SBA loan.
SBA Form 912 Question 8 or 9
An affirmative answer to questions 8 or 9 is a different story. These questions deal with a past criminal record. A “yes” to these questions will definitely slow down your loan application, but you could still be eligible for a loan.
Criminal Activity You’re Required to Report
According to Lola Kress, Regional Communications Director for the SBA, this includes all felonies, regardless of how long ago they happened, and any other criminal offenses that have occurred within the last six months that have been fully adjudicated.
“If the conviction was a felony conviction it must be disclosed. Any convictions within six months of the date of application must be disclosed. Convictions older than six months with the exception of felonies does not require disclosure.”
— Ms. Kress
How the SBA Handles Past Convictions
All loan applications are evaluated on a case-by-case basis based on the nature, frequency, timing of the offenses, and disposition of the offenses. Here are various scenarios and how the SBA may look at them:
One misdemeanor that was not prosecuted
In this case, it is possible for your lender to clear the misdemeanor without consulting the SBA. Your lender may not require fingerprints or a background check. You also only must report the misdemeanor if any portion of the proceedings occurred in the last 6 months.
2-3 misdemeanors that took place at least 10 years before your loan application
In this case, you don’t have to report the misdemeanors because they occurred more than 6 months ago. While the SBA doesn’t need to know about them, your lender may have different requirements, however. Make sure you understand what their rules are before you submit documentation to them.
Any felony that occurred at any time in your life
You will be required to pass a background check and provide fingerprints. Your application must be cleared by either the Office of the Inspector General or the Office of Security Operations. While the length of time since the occurrence may increase your approval chances, a felony still must be reported even if it was more than 20 years ago.
Required Documentation for Past Convictions
You must provide a written explanation of every offense on your record as part of SBA Form 912. Each written statement should include “any pertinent information,” including the date of the offense, the specific jurisdiction where the offense to place, the specific charges you faced, whether it was a misdemeanor or felony, a description of the charges, any unpaid fines, the name under which you were charged, and a letter from your parole or probation board (if applicable) detailing that the conditions of your parole or probation have been met.
Once you have written your statement, you must sign and date it and attach it to your SBA Form 912 Statement of Personal History along with the statement from your parole or probation board. You must also include any official court documents that validate your offense and show when it was adjudicated and resolved.
If you have any prosecuted misdemeanors or felonies, you will have to provide fingerprints and consent to a background check. In this case, you must submit your form 912 at the local SBA office, where they will take your fingerprints. Be aware that SBA loan applications that require fingerprints can take an additional 6-12 weeks for processing. To find your local district SBA office, check the list here.
Bottom Line: SBA Form 912
SBA Form 912 can make or break your SBA loan application, so be sure to answer everything completely and truthfully. If you have to answer yes to questions 8 or 9, it is difficult to predict how this will impact your loan application, but it is definitely still worth pursuing an SBA loan. You just need to be truthful about all of your past criminal activity, and you need to provide the correct supporting documentation or your loan will be drastically delayed or outright denied.
For a more streamlined SBA loan process, we recommend SmartBiz. To qualify you must have a credit score above 680 (check your score for free), have been in business for 2+ years, and are profitable. They can prequalify you in minutes and get you funded in around 30 days.
Need other SBA forms? We’ve got you covered!