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SBA quick-check

SBA-guaranteed loans can be a great fit for some businesses, but SBA has basic rules about who can use them. Answer 13 short yes, no, or not sure questions to see whether anything in those basic rules might be an issue for you. This is not an eligibility decision. Only a lender, and in some cases SBA, can make that call.

Reviewed October 1, 2026 by Brandon Chiesa, a Central Virginia business banker with 15+ years of experience.

SBA rules change. This quick-check reflects SBA's basic rules as of October 1, 2026. Check SBA.gov or a lender.

Answered 0 of 13

Question 1 Is the business organized to make a profit?

Nonprofits are not eligible; for-profit subsidiaries of nonprofits can be.

Source

13 CFR 120.100(b), 120.110(a)

Question 2 Is it an operating business (or will it be, once you buy or start it)?

A company that only owns property can sometimes qualify if it leases to an operating business it is tied to. Ask a lender.

Source

13 CFR 120.100(a), 120.111

Question 3 Is the business located in the United States?
Source

13 CFR 120.100(c); sba.gov 7(a) page

Question 4 Is the business "small" under SBA's size standard for your industry, counting affiliated businesses?

Check with SBA's Size Standards Tool

Source

13 CFR 120.100(d); SBA size standards page

Question 5 Is the business mainly any of these?
See the list
  • Lending or financing businesses (banks, finance companies, factors). Some pawn shops may qualify.
  • Passive businesses owned by developers or landlords that do not use or occupy the property (with an exception for certain Eligible Passive Companies)
  • Life insurance companies
  • Businesses located in a foreign country
  • Pyramid sale distribution plans
  • Businesses earning more than one-third of gross annual revenue from legal gambling
  • Businesses engaged in any activity that is illegal under federal, state, or local law
  • Private clubs that limit membership for reasons other than capacity
  • Government-owned entities (except businesses owned or controlled by a Native American tribe)
  • Loan packagers earning more than one-third of revenue from packaging SBA loans
  • Businesses in which the lender or CDC (or its associates) owns an equity interest
  • Businesses presenting live performances of a prurient sexual nature or earning more than de minimis revenue from such material
  • Businesses primarily engaged in political or lobbying activities
  • Speculative businesses (such as oil wildcatting)
Source

13 CFR 120.110

Question 6 Has the business, an owner, or a business an owner previously controlled ever defaulted on a federal loan or federally backed loan that caused the government a loss?

Includes settled (compromised) debts. SBA can waive this for good cause.

Source

13 CFR 120.110(q)

Question 7 Is any owner or key person currently incarcerated, or under indictment for a felony or a crime involving financial misconduct or a false statement?
Source

13 CFR 120.110(n)

Question 8 Are all owners (direct and indirect) U.S. citizens or U.S. nationals whose principal residence is in the U.S.?

SOP 50 10 8.1 requires U.S. citizens or U.S. nationals with principal residence in the U.S., its territories, or possessions for owners and SBA-required guarantors. Confirm with a lender.

Source

SOP 50 10 8.1 Section A, Ch. 1, Para. F; SBA Procedural Notice 5000-876626

Question 9 Will the owners put their own money into the project?

Under SOP 50 10 8.1, startups (about one year of revenue or less) and many business purchases generally need at least 10% equity. Acquisition details vary by transaction type in Appendix 15. For 504 projects, SBA describes at least 10% from the borrower.

Source

SOP 50 10 8.1; sba.gov lender program page

Question 10 Could you get this same loan on reasonable terms from a lender without an SBA guarantee?

SBA loans are meant for credit that is not otherwise available on reasonable terms.

Source

13 CFR 120.101; sba.gov 7(a) page

Question 11 Is the business current on federal taxes and any government loans?
Source

13 CFR 120.130(e); 13 CFR 120.150

Question 12 Will the money be used for the business itself (not to buy property to hold for investment, and not to pay owners beyond normal pay except in an approved ownership change)?
Source

13 CFR 120.130

Question 13 Can the business's cash flow reasonably cover the new payments?

DSCR calculator

Source

sba.gov 7(a) page ("creditworthy and demonstrate a reasonable ability to repay"); 13 CFR 120.150

Answer all questions to see your result.

What to do with your results

  • Which answers are still Not sure, and who can confirm them?
  • If a possible issue showed up, ask a lender whether an exception or a different loan still fits.

How to use

  1. Answer each question. If you are not sure, pick "Not sure" and read the helper text.
  2. Review your result: "possible fit" or "possible issue," with a short reason for each issue.
  3. Take your result and questions to a lender. SBA rules change, so confirm details at SBA.gov.

Worksheets to use with this

Related tools

Estimates for education only. Not an offer of credit or a promise of approval. Actual terms depend on the lender and credit approval. Not affiliated with any employer. Read the full disclaimer.

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