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SBA 7(a) Paperwork Explained: SBA Form 912
When you're applying for an SBA 7(a) loan, one of the forms you'll have to fill out is the SBA Form 912. The SBA uses Form 912 as a statement of personal history to help determine the your eligibility for a loan. This form applies no matter what type of SBA loan you’re getting. Some lenders require
When you're applying for an SBA 7(a) loan, one of the forms you'll have to fill out is the SBA Form 912. The SBA uses Form 912 as a statement of personal history to help determine the your eligibility for a loan. This form applies no matter what type of SBA loan you’re getting. Some lenders require applicants to fill out this form regardless of criminal history, while others only require it if you indicated that you have a criminal record in one of the other forms in your loan application paperwork.
Here's the official form from the SBA:
Who should fill out the form?
As with most of the SBA loan paperwork, the business owner and his or her partners should complete the form. For Form 912, these owners and partners could include:
Business owners – defined as anyone with at least 20% equity in the company
Officers and directors – including any person hired to manage day-to-day operations
Loan guarantors (co-signers)
You are currently subject to any criminal charges (this will disqualify you from an SBA loan at this time)
You have been arrested in the past six months for any criminal offense
If you’ve ever been convicted of a criminal offense (other than a minor vehicle violation)
What documents are required to apply for an SBA 7(a) loan?
To apply for an SBA 7(a) loan, you will need to provide the following documents:
- Agreement to purchase the business
- Letter of intent to buy the business
- Business tax returns for the past three years
- Any outstanding business debt
- Long-term business contracts
- Documentation of business assets
- Business lease agreement
- Incorporation documents and/or business license
- Business plan
In addition, the SBA will usually order an independent business appraisal to give lenders an idea of what the true value of the business is.
To complete your application package, you’ll be required to submit SBA-specific forms and documents. The forms and documents commonly required in the application package include:
- SBA Form 1919 (borrower information form)
- SBA Form 912 (statement of personal history)
- SBA Form 413 (personal financial statement)
- Financial statements, including a balance sheet, profit and loss, and income projection.
The SBA allows applicants to get help (for example, from a lawyer or a translator) filling out the application paperwork, but your lender will be required to submit information about who gave you help to the SBA, so you’ll need to document who this person is as well.
What is the purpose of SBA Form 912?
The purpose of SBA Form 912 is to provide the Small Business Administration (SBA) with information to assess your character and creditworthiness. It is used as part of the assessment of program eligibility and to make a character and credit eligibility decision to fund or deny a loan. All business owners (owners of any percentage of the business) must complete this form. It can be downloaded here.
The form is a single page on which you will provide information such as your name and address, previous names you have used, previous addresses, criminal history information, citizenship information, and the like. The reverse of the page provides legal notices concerning the Privacy Act and Paperwork Reduction Act.
Business owners and their partners should complete the form, including business owners with at least 20% equity in the company, officers and directors, and loan guarantors (co-signers). All applicants will need to provide personal information including name and address, citizenship status, and the percentage of the business they own.
How long does it take to complete the SBA 7(a) loan paperwork?
The SBA 7(a) loan paperwork can take anywhere from 7-10 business days to process if you are using the Standard 7(a) Loan Processing model. This is used by lenders who will only see an SBA 7(a) loan application occasionally. The SBA reviews the package and will usually confirm the lender’s decision about whether to approve the loan.
If you are using the Certified Lenders Program (CLP) Processing model, the process is much shorter and only takes three business days. Certified lenders have experience dealing with borrowers under SBA loan programs and have met specific performance standards. The SBA is able to expedite application approvals for borrowers dealing with these lenders.
What is the difference between SBA Form 912 and SBA Form 413?
SBA Form 912 is a statement of personal history, and is one of several forms used by the SBA to help assess your character and your creditworthiness. It can be downloaded here. On this form, you will provide information such as your name and address, previous names you have used, previous addresses, criminal history information, citizenship information, and the like.
SBA Form 413 is required when applying for both SBA 504 and SBA 7(a) loans, and is a personal financial statement. According to the SBA, “The SBA uses the information required by the form 413 as one of a number of data sources in analyzing the repayment ability and credit worthiness of an application for an SBA guaranteed 7(a) or 504 loan or a guaranteed surety.” You can download this form here. On this form, you will list out your personal information, your financial assets (cash, savings, vehicles, and more), as well as your liabilities, such as accounts payable, additional notes payable, real estate mortgages, and the like. You will also list sources of income, contingent liabilities, and more.
In summary, SBA Form 912 is used to assess your character and creditworthiness, while SBA Form 413 is used to assess your repayment ability and credit worthiness.
What is the maximum loan amount available through the SBA 7(a) loan program?
The maximum loan amount available through the SBA 7(a) loan program is $5 million, as stated on the SBA 7(a) Loan Programs page.
All applicants will need to provide personal information including name and address, citizenship status, and the percentage of the business they own.
What if I have a criminal record?
You may still be eligible for the loan, but you’ll need to provide details about your criminal history. If you fail to provide full and adequate details, the SBA will deny your application. Form 912 will ask if:
If any of these apply to you, you’ll need to provide details on a separate sheet. Include dates of incidents, locations, fines, sentences, whether the incidents were misdemeanors or felonies, which name you were charged under, parole or probation information, and anything else pertinent to the incident. This statement should be signed and dated. Include any official court documents that support your statement.
You should provide these details even if your record was expunged or is otherwise unavailable. This will help you build a case for your trustworthiness, and help your application avoid unnecessary delays.
When are fingerprints required?
If you have any misdemeanors or felonies against you that have been prosecuted, you will be required to consent to a background check, including fingerprinting. The fingerprinting will be done at your local SBA office. Applications that require fingerprints take longer to process.