At Prudent Lenders, we know borrowers with excellent business ideas may have suffered from prior mistakes, even those resulting in a criminal record. It’s important to recognize an SBA loan isn’t out of reach for many of these prospective borrowers. If you have clientele in this position, keep their financing door open.
Oftentimes, lenders will disqualify borrowers with criminal histories after noting the SBA requirement that “owners and managers of the small business be of good character.” But, together, we can help you and your borrower overcome this significant hurdle to SBA eligibility.
Given the time-consuming nature of obtaining proper clearances, it’s essential to begin the pre-approval process as soon as possible. Prudent Lenders can efficiently coordinate the clearance process for you and your prospective borrowers.
What is the purpose of the SBA Form 912 or The Statement of Personal History?
The SBA Form 912 (“Statement of Personal History”) helps lenders to:
- Internally clear applicants with past misdemeanor offenses.
- Obtain an SBA-approved clearance for many clients with past felony records.
How do you complete SBA Form 912?
Our step-by-step overview of the SBA 912 Form will help you get started:
Step 1: Complete SBA Form 912:
- Your borrower must fill out SBA Form 912–or the Statement of Personal History–in its entirety. Initials are required on questions #5, #7, #8, and #9. A signature is required at the bottom of the form.
Step 2: Discuss the Offenses
Provide Prudent Lenders with the following information:
- When: Date of offense, including month, day (if possible) and year.
- Where: City and state, or county and state where offense/s occurred.
- What: Description of the specific charges (e.g. DUI, assault, forgery, robbery).
- Charge/s: Description of the level of individual charges (e.g. misdemeanor, felony).
- Disposition of Charges/How: Description of the disposition of the charges, including any fines imposed, jail time, probation terms, and so on.
Step 3: Provide Required Documents
Applicants must include the following documentation:
- A copy of the court docket.
- A letter from the courthouse, or other such certified documentation from the courthouse, verifying the disposition of the charges.
- A dated and signed explanation of the incident including verified statement that all conditions of the court have been satisfied.
- A short paragraph describing the incident and a follow-up statement describing what the borrower is doing to ensure the offense will not occur again (this statement should be very specific).
- If a felony arrest has been disclosed, a Fingerprint Card (FD 258) must be completed and submitted to the SBA for clearance.
Step 4: Submit Forms
In cases of misdemeanor charges:
- Submit all forms and documentation, as stated above in step #3, to Prudent Lenders.
- The lender must provide signed certification that the applicant has been cleared of any and all misdemeanor charges.
- The lender must provide the following language in a letter to the file: “The lender has retained the supporting information and court documentation for [insert borrower’s legal name], including the original SBA Form 912 in the file and determined upon review of the court’s disposition that all disclosed crimes were misdemeanor convictions whose conditions were met more than six months prior to receipt of the application and there were no convictions for crimes against minors.”
In cases of felony charges:
- Submit all forms and documentation, as noted above in step #3, to Prudent Lenders.
- Mail the Fingerprint Card (FD 258) and all necessary documentation to:
Chris Levy, NYBDC
50 Beaver Street, fifth floor
Albany, NY 12207