SBA SOP 50 10 8, A.Ch1.E.15 — Prior Loss to the Government 13 CFR § 120.110 (q)
Verbatim text of SBA SOP 50 10 8 section A.Ch1.E.15 (Prior Loss to the Government 13 CFR § 120.110 (q)), effective 2025-06-01. 2 provision(s) quoted from the SOP PDF. SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.
SBA lending corpus: SOP 50 10 and the active notices, with the expiry watcher.
Verbatim regulatory text
Verbatim provisions from SBA SOP 50 10 8, A.Ch1.E.15 — Prior Loss to the Government 13 CFR § 120.110 (q) — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
SOP 50 10 8 A.Ch1.E.15
15. Prior Loss to the Government 13 CFR § 120.110 (q) An Applicant is not eligible for a 7(a) or 504 loan if there is a prior loss to the Federal government. A “Prior Loss” has occurred when: i. The Applicant has previously defaulted on a Federal loan or federally assisted financing, resulting in a loss to the Federal government or any of its agencies or departments; or ii. Any other business owned, operated, or controlled by the Applicant or an Associate of the Applicant, previously defaulted on a Federal loan or federally assisted financing (or guaranteed a loan which was defaulted), resulting in a loss to the Federal government or any of its agencies or departments. For purposes of this paragraph, “loss” means any deficiency on a Federal loan or federally assisted financing that has been incurred and recognized by a Federal agency after it has concluded its write-off and/or close-out procedures for the particular account and includes any amount compromised for less than the full amount, discharged through bankruptcy, and any unreimbursed advance payment under 8(a) or a similar program operated by a Federal agency. NOTE: “Loss” does not include unpaid/delinquent taxes or any loss incurred by the Federal Deposit Insurance Corporation (FDIC) when it sells a loan at a discount. “Federal loan or federally assisted financing” includes: i. Any loan that is made for business purposes (including Federal disaster loans) by any Federal agency or department either directly or on a guaranteed basis; and ii. Any advance payments under 8(a) or similar programs operated by any Federal agency. NOTE: “Federal loan or federally assisted financing” does not include any loan purchased, held, or securitized by Fannie Mae or Freddie Mac or any Federal loan or federally assisted financing issued to an individual (e.g. student loan). All SBA Lenders should check the Credit Alert Verification Reporting System (CAIVRS), to determine if the Applicant is ineligible for a 7(a) or 504 loan because the Applicant or a business owned, operated, or controlled by the Applicant or any of its Associates has a Prior Loss. i. CAIVRS allows the SBA Lender to enter multiple tax identification numbers (either SSN or EIN) to conduct a search in connection with a loan application.
SOP 50 10 8 A.Ch1.E.15.i.ii
ii. SBA Lenders may access CAIVRS at https://entp.hud.gov/caivrs/public/home.html. If a Prior Loss to the Government is fully satisfied, the application can be processed, including under an SBA Lender’s delegated authority. The SBA Lender must document its file as to how the loss has been fully satisfied. All SBA Lenders must inform the Applicant that if the small business defaults on the SBA-guaranteed loan and SBA suffers a loss, the names of the small business, the guarantors of the SBA-guaranteed loan, and any Associate(s) that control the Applicant, will be referred for listing in the CAIVRS database, which may affect the eligibility of a business owned or controlled by any such individual(s) or entity(ies) for future financial assistance from SBA or other Federal agencies or departments.
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