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As part of the rigorous SBA loan application process, the SBA and your intermediary lender don’t only evaluate your business’s financials and your plans for the loan; they also evaluate the business owner and its principals’ personal characters. SBA Form 1919, the Borrower Information Form, plays a major role in that assessment.
As you likely know, SBA loans are disbursed by banks or other partner lenders, but they’re backed by the U.S. Small Business Administration. Thanks to that government guarantee, lenders can offer approved SBA borrowers some of the most generous and affordable loans on the market—which also means these loans are highly competitive. As a result, the SBA can afford to hold their borrowers to incredibly high standards. What that means for applicants? Piles of paperwork—like SBA Form 1919—that dive deep into your and your business’s finances and history.
Here’s a comprehensive guide to the Borrower Information Form, including tips on how to fill it out accurately so you can ensure the smoothest SBA application process possible.
SBA Form 1919, the SBA 7(a) Borrower Information Form, collects a range of background information about SBA 7(a) loan applicants, other principals of the applicant’s business, and the business in general.
Expect to answer questions about the purpose of your loan request, current or previous government financing, your involvement in any current or pending legal action, and other crucial details about the nature of your business. All of the data you provide here plays a part in determining your loan eligibility, and it also facilitates background checks.
If you’re a business owner applying for any variation of an SBA 7(a) loan or the Community Advantage program, you’ll need to complete SBA Form 1919.
The following stakeholders will also need to complete their own versions of this form, according to your business entity:
Regardless of your business’s legal organization, anyone hired to manage daily operations will need to fill out their own SBA form 1919, as will any guarantors, trustors, and co-applicants involved in your SBA loan application.
SBA Form 1919 is divided into two sections: The first asks for information about the business, and the second digs into the principals’ personal histories. We’ll go through each of these sections in greater detail here.
Before launching into the form’s yes-or-no/true-or-false questions, you’ll need to provide basic information about your business, including your business name as it appears on your tax returns, your address, your EIN, and your DBA if your business operates under a name other than its legal name. Applicants also need to mark whether they’re an operating company (OC), or eligible passive company (EPC).
Next you’ll answer a few questions about your loan request, including:
The answers to these questions will give the SBA a better understanding of why you’re applying for an SBA loan, and how the loan will benefit your business. (Because these loans are so competitive, the SBA needs to ensure that they’re going to the businesses that truly need these funds, and will use them positively.) Note that if you don’t know the exact number of jobs that would be created or lost, you can make your best estimate. You also don’t need to include contract workers or freelancers in your headcount.
The final field in this top section is dedicated to information about your business’s ownership. Here, you’ll list all owners, their titles, the percentage of their stake in this business, and their addresses. If you need more room to complete this section, you can attach additional sheets.
The first 11 questions on SBA Form 1919 are yes-or-no questions. If you mark “yes” to any of these questions, you’ll need to provide additional details on a separate sheet of paper.
The next set of questions in Section I have true-or-false answers. These questions ensure that there are no conflicts of interest between the business and an SBA or other governmental employee.
For the purposes of an SBA loan, a conflict of interest might look like:
…Along with a few other scenarios. If you answer “false” to any of these questions, your loan application won’t necessarily be denied; it’ll just need to be processed directly through the SBA, rather than through your intermediary lender, and then through alternative procedures. You might also need to disclose further information about the nature of the relationship between the business and the government employee.
Once you’ve completed Section I, you’ll enter your signature, date, title, and printed name in the provided fields. Be sure to review your answers, and also ensure that you’re providing additional information whenever it’s requested (in other words, if you’ve answered “yes” to any questions between one and 11, or “false” to any questions between 12 and 16).
Also read over the representations and certifications to which you’re bound after you sign. That includes complying with SBA’s stipulations, only using your SBA loan for business purposes, and purchasing American-made equipment and products whenever possible.
In the second section of SBA Form 1919, the SBA collects personal information about the business’s owners and principals.
“Owners and principals” includes the business owner, anyone who owns 20% or more of the company, partners, officers, directors, managing members, trustors, as well as anyone you’ve hired to manage your business’s daily operations. All of these individuals (or entities) are responsible for filling out their own versions of SBA Form 1919, Section II.
The first part of Section II requests personal identifying information about the business’s principals. Expect to provide fairly standard information here, including your legal name, date and place of birth, contact information, SSN or EIN (if the applicant is an entity), and the percentage of ownership you have in the business.
Next, the SBA requests data about your veteran status, gender, race, and ethnicity, but you can choose whether or not you want to disclose this information. The SBA collects this information only for program reporting purposes, and your answers won’t have any impact on the loan decision.
Next, the applicant needs to answer a series of yes-or-no questions, all of which help determine the applying business’s loan eligibility.
As in Section I, if you answer “yes” to any of these questions, you’ll need to provide a more detailed explanation on an attached sheet.
Remember to initial your response to question 19, too.
After reviewing your answers, any additional details you may need to provide, and the representations and authorizations (which are the same as in Section I), you’ll sign, date, and print your name and your title. And then—you’re done!
The government and your lender need to take every precaution available to mitigate the risk of a borrower defaulting on an SBA loan. Among those precautions is the assurance that the business owner, and its major stakeholders, are reliable and trustworthy enough (according to their standards) to honor their debt agreements. SBA Form 1919 is just one document that will help your lender and the SBA reach that conclusion.
And SBA Form 1919 is just one of many documents that you’ll need to include in your SBA loan application. If you’re overwhelmed by the prospect of organizing, fulfilling, and packaging all these documents to send along to your lender, know that there are scores of professionals out there to help you. Working with a loan specialist to guide you through this and all the other SBA forms you’re responsible for will ensure a quicker, smoother application process—and free up some of your mental energy so that you can focus on growing your business in the meantime.