A disqualification and a denial are different events. A denial is one lender’s credit judgment — another bank may say yes. A disqualification is a rule in 13 CFR Part 120 or current SBA procedure: every lender must say no, until the bar is cured or waived. Most pages for this search mash the two together, then pad the list with folklore — including a top-ranking claim (a “three bankruptcies” limit) that exists in no SBA rule at all. Table 1 is the real list, each bar traced to its source. Table 2 is what is not on it.
General information, not financial advice or a loan offer. Bars per 13 CFR §§120.101, 120.110, 120.130, 120.171 and SBA SOP 50 10 8.1, as reviewed October 2026.
| §120.110 | Barred |
|---|---|
| (a) | Non-profit businesses (for-profit subsidiaries are eligible) |
| (b) | Financial businesses primarily engaged in lending — banks, finance companies, factors (pawn shops may qualify in some circumstances) |
| (c) | Passive businesses owned by developers or landlords not actively using the assets (the Eligible Passive Company structure, §120.111, is the exception) |
| (d) | Life insurance companies |
| (e) | Businesses located in a foreign country (the reg’s “U.S. businesses owned by aliens may qualify” is overridden in practice by the 2026 ownership bar below) |
| (f) | Pyramid sale distribution plans |
| (g) | Businesses deriving more than one-third of gross annual revenue from legal gambling |
| (h) | Businesses engaged in any activity illegal under federal, state or local law |
| (i) | Private clubs and businesses limiting membership for reasons other than capacity |
| (j) | Government-owned entities (Native American tribe-owned businesses excepted) |
| (m) | Loan packagers earning more than one-third of gross annual revenue from packaging SBA loans |
| (n) | Businesses with an Associate currently incarcerated, serving a sentence of imprisonment on adjudication of guilt, or under indictment for a felony or any crime involving financial misconduct or a false statement |
| (o) | Businesses in which the lender, CDC or any of their associates own an equity interest |
| (p) | Businesses presenting live performances of a prurient sexual nature, or deriving more than de minimis revenue from such products or depictions |
| (q) | Prior default on a federal loan or federally assisted financing that caused the government a loss — by the business, or by any business the applicant or associates owned, operated or controlled (a compromise agreement counts as a loss) — unless the SBA waives it for good cause |
| (r) | Businesses primarily engaged in political or lobbying activities |
| (s) | Speculative businesses (e.g., oil wildcatting) |
(Paragraphs (k) and (l) are reserved in the regulation.)
Form 1919 asks the criminal-history questions. “Yes” answers — an arrest within six months, charges, convictions beyond minor traffic — trigger Form 912, supporting court documents, a background check and an SBA character determination. That is a review, not a verdict: older, minor, resolved history routinely passes it. (Some lenders collect Form 912 from every principal anyway — lender habit, not an SBA universal.)
| Claim | Reality |
|---|---|
| “Three bankruptcies disqualify you — two is the max” | No such rule exists in Part 120. Bankruptcy history is lender credit judgment plus character review. The claim circulates with no source, because there isn’t one. |
| “A pending divorce disqualifies you” | Not an SBA rule. Divorce complicates lender underwriting — guarantees, asset division — but no regulation bars an applicant over it. |
| “Any criminal charge within six months is an automatic bar” | The six-month arrest question on Form 1919 triggers the Form 912 review. The automatic bars are current status: incarceration, sentence, indictment, parole/probation. |
| “A low credit score disqualifies you” | The SBA sets no minimum score — §120.150. Scores are lender floors; see the credit score page. |
| “Being a startup disqualifies you” | Startups are eligible; lenders scrutinize them harder and equity expectations rise. |
| “Insufficient collateral means automatic denial” | Under §120.150’s principle, inadequate collateral alone is not a ground for denying an otherwise sound loan. |
If your problem is Table 2, you don’t have an eligibility problem — you have a lender-matching problem, and the eligibility hub routes you to the next step. If it is Table 1, no lender can help until the bar is cured or, for a prior loss, waived.
What disqualifies you from an SBA loan? The bars in Table 1: an ineligible business type (§120.110), non-citizen ownership under the March 2026 rule, a prior federal-loan loss without a waiver, unresolved delinquent federal debt, a banned use of proceeds, a 50%+ owner 60+ days behind on child support, or an associate currently incarcerated or under indictment.
Why was my SBA loan declined? Probably not a disqualification. Most declines are credit judgments — cash flow that won’t carry the payment, a score below that bank’s floor, thin collateral, weak projections (Nav’s denial reporting). A decline from one lender says nothing about your eligibility, and nothing stops you applying at another: disqualifications are rules; declines are opinions.
Can I get an SBA loan if I owe student loans? Yes, if they’re current. Federal student loans only bar you when they’re delinquent federal debt — and that bar lifts once the debt is resolved or in a repayment plan you’re keeping. The amount you owe is not itself a disqualifier.
Can I get an SBA loan with a criminal record? It depends on currency and severity, not on the mere existence of a record. Current incarceration, a sentence being served, indictment, or parole/probation status bars the business (§120.110(n)). Older, resolved history goes through the Form 912 character determination, where the SBA — not folklore — decides. Answer Form 1919 exactly; the determination punishes concealment more than history.
General information, not financial advice or a loan offer. Sources: 13 CFR §§120.101, 120.110, 120.111, 120.130, 120.150, 120.171; SBA SOP 50 10 8.1; Policy Notice 5000-876441 / Procedural Notice 5000-876626 (citizenship); SBA Forms 1919 and 912; Nav requirements and denial reporting (CAIVRS, as attributed); Guidant and NerdWallet disqualifier lists (folklore items, as flagged). Currency verified 2026-10-23.