The Small Business Administration (SBA) Statement of Personal History form, otherwise known as SBA Form 912, is used to determine a borrower’s trustworthiness and to evaluate whether the applicant or their business partners have any criminal history. The information gathered by SBA Form 912 helps determine if a borrower is of good character. Completing the form accurately and in detail will help prevent delays or loan denials.
Certain SBA loan applications might not require you to complete SBA 912. However, a potential borrower will still have to explain any “yes” answer that might bring their character into question. This can be accomplished by filling out SBA 912.
You can download SBA Form 912 from our download widget below, or you can download it from SBA’s website.
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 definition is based on the SBA’s assessment of your integrity, behavior, and 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, including:
- Business owners: Every owner with 20% or more equity
- Officers and directors: Any company officers, directors, managing limited liability company (LLC) members, trustors, or any person hired by the applicant to manage the day-to-day operations of the business
- Loan guarantors: Any guarantor of the SBA loan you’re applying for
Form 912 needs to be filled out no matter which type of SBA loan you apply for. 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.
SBA Form 912 requires basic personal information obtained in questions one through six, with the most significant portion of the form requiring answers to three subsequent questions related to the applicant’s criminal history.
Be honest with your responses: SBA Form 912 indicates that 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. The information you provide may be verified with a background check.
SBA 912 Questions 1 to 6: Personal Information
Questions 1 to 6 of SBA Form 912 request basic personal information, including name, address, ownership percentage, date and place of birth, and citizenship information.
SBA 912 Questions 7 to 9: Criminal Record History
Questions 7 to 9 of SBA Form 912 deal with your criminal record, if one exists.
You must answer these questions truthfully, even if your record was sealed, expunged, or is otherwise unavailable. When you sign this form, you agree 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. However, if you have to answer “yes” to any of these questions, there may be additional work ahead for you. The rest of this article will address a “yes” response to any of these questions.
SBA Form 912 Question 7
Question 7 asks, “Are you presently subject to an indictment, criminal information, arraignment, or other means by which criminal charges are brought in any jurisdiction?” If you or any other principal answers “yes,” unfortunately, you are ineligible for an SBA loan. The SBA will not guarantee loans to businesses whose principals are currently indicted, incarcerated, on probation or parole, or defendants in a criminal proceeding.
Due to the chance that the owner or a principal of a business may go to prison, it may become exceedingly difficult for the business to be effectively run and also pay back the loan. The business must wait until all parties are no longer subject to any legal proceedings or are no longer under parole or on probation before they can attempt to apply again.
SBA Form 912 Questions 8 and 9
Questions 8 and 9 of SBA Form 912 address your criminal record. Unlike a “yes” answer in question 7, an affirmative answer to questions 8 or 9 does not automatically disqualify you from SBA eligibility. It can, however, slow down your loan application approval.
The information that needs to be disclosed depends on the severity of the conviction and when it occurred.
SBA Form 912 Statement 10, Signature & Additional Documentation
The final parts of SBA 912 include statement 10, which authorizes the SBA to request criminal information about you to determine your eligibility for an SBA loan. You will agree to this when you sign the form.
Once you complete the form, you will then need to sign it, including your title and the current date. The penalty for false statements is listed above the signature line as one final reminder to complete the form honestly and accurately.
All loan applications with affirmative answers to questions 8 or 9 are evaluated on an individual basis with the nature, frequency, and timing of the offenses taken into consideration. You must provide a written explanation of any offense that triggers an affirmative response. Each written statement should include:
- The date of the offense
- The specific jurisdiction where the offense took place
- The specific charges you faced and whether it was a misdemeanor or felony
- Any unpaid fines
- The name under which you were charged
- If applicable, a letter from your parole or probation board detailing that the conditions of your parole or probation have been met
If you answered “yes” to questions 8 or 9, be sure to include a statement from your parole or probation board and any official court documents that validate your offense and show when it was adjudicated and resolved.
How the SBA Handles Past Convictions
Here are three scenarios involving prior criminal history and how the SBA may look at them:
- One misdemeanor that was not prosecuted: In this case, your lender can clear the misdemeanor without consulting the SBA. Your lender may not require fingerprints or a background check. Also, you only have to report the misdemeanor if any portion of the proceedings occurred within the last six months.
- Multiple misdemeanors that occurred several years before your loan application: As these occurred over six months before, you are not required to disclose information to the SBA. However, your lender may have different requirements. Make sure you understand what their rules are before you submit documentation to them.
- Any felony: 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.
Frequently Asked Questions (FAQs)
Yes, you will need to provide your business taxes as part of your profit and loss statement. In addition, your tax statement may be one of the documents required by your SBA lender to prove business ownership. You may also be required to provide up to two years of personal taxes. The exact documents required by your lender may vary, so have all your documents prepared before applying to expedite the loan process.
You will be disqualified if you or any of your business partners are currently indicted, incarcerated, on probation or parole, or a defendant in a criminal proceeding.
While a past criminal record may not automatically disqualify you from getting an SBA loan, you might be disqualified if the offense was financially related. If you have previously defaulted on a government loan, you may be disqualified from getting an SBA loan. Otherwise, you can be turned down for an SBA loan for the same reasons as other loans: poor credit, poor repayment history, lack of collateral, and lack of income to repay the loan.
SBA loans are backed by the federal government, which allows for lower interest rates than other types of loans. However, because of the government involvement, they often take longer from application to funding than other loans.
Also, these loans require a higher minimum credit score and time in business requirement as the government doesn’t want to give loans that have a higher chance of not being repaid. Finally, certain SBA loans have specific use requirements, which can make them harder to obtain than a traditional term loan.
SBA Form 912 requires honesty and accuracy to ensure the SBA will guarantee your loan application. If you answer “yes” to questions 8 or 9, it is difficult to predict how this will impact your loan application, but pursuing an SBA loan is still worth it. Anyone who answers “yes” to questions 8 and 9 must provide supporting documentation or their loan will be delayed or denied.
For more information about getting funding for your business, see our guide on how to get a small business loan. If you are looking for an SBA loan, Guidant can help. Guidant Financial can help businesses put together their SBA loan applications and find the lenders most likely to work with them. Visit Guidant’s website for more information.