The Small Business Administration and lenders who provide SBA loans ask applicants to complete Form 1919 as a required part of the application process. The form was recently updated to make it easier for borrowers to fill out. This article gives you clear information about these changes to the form to help you complete it successfully.
What is Form 1919 and how is it used?
SBA Form 1919 is a Borrower Information Form. Form 1919 is required if you’re applying for an SBA 7(a) loan. It collects all of the information the SBA needs to perform a complete background check for a potential borrower, including:
- Your background
- Co-owners/co-applicants and other major players involved in running your business
- Other companies that may be influential in your business in the long term
- Existing debt
- Other sources of government financing your business has received or will receive in the near future
These factors come together to give the SBA lender a comprehensive picture of your business’s health. This is important since the lender needs to be sure your business has a strong enough foundation to stay open for the length of the loan repayment period.
General Updates on SBA Form 1919
As of September 2023, Form 1919 is no longer divided into numbered sections, and the SBA’s instructions for completing it are now at the end of the document on page 5.
Here are some new things to note when completing each portion of the form:
Business Information/Loan Purpose
One piece of information you need to provide in this section is your business’s Primary Industry/NAICS Code. This code must match the business activity code provided on your IRS income tax filings.
Applicant Ownership and Demographic Information
The second page asks for personal information for each of the business’s owners.
A separate version of this page must be completed for each owner. This includes any individual or entity that owns at least 20% of the business, and at least 51% of the Beneficial Owners. This means that if all of the owners listed own less than 20% of the business, the total listed owners must equal at least 51%. If any of the owners is an entity, the individual who owns the entity should complete this portion on their behalf.
The demographic information of this section is optional to complete.
Yes/No Questions
The form includes a page of Yes or No questions. If you answer “yes” to any of the questions, you will have to provide your reasoning for that answer in a separate attachment.
Here are some tips for this section:
- Question 1: “Is the Applicant or if the Applicant is structured as an Eligible Passive Company (EPC) and Operating Company (OC), both the EPC and OC, or any Associate of the Applicant presently suspended, debarred, proposed for debarment, declared ineligible, voluntarily excluded from participation in a transaction by any Federal department or agency, or presently involved in any bankruptcy?”
- If you answer “yes” to this question, you must provide a copy of the initial bankruptcy filing and the bankruptcy discharge paperwork before your loan can be approved.
- Question 4: “Is the Applicant or any Associate of the Applicant presently incarcerated, on probation, on parole, or presently subject to an indictment for a felony or any crime involving or relating to financial misconduct or a false statement?”
- If you answer “yes” to this question, your application will be denied.
- Question 6: “Has the Applicant paid or committed to pay a fee to the Lender or a third party to assist in the preparation of the loan application or application materials, or has the Applicant paid or committed to pay a referral agent or broker a fee?”
- You should answer “yes” to this question if you’re paying a package fee or a referral fee.
- Question 13: “Is the Applicant, any owner of the Applicant, or any business owned by them (Affiliates), presently involved in any legal action (including divorce)?”
- If you answer “yes” to this question, any legal action must be resolved before your loan can be approved.
Other Details to Note
You may need to submit multiple versions of the form. If another business is a co-applicant, you must submit a separate form for that business, and it must be completed by an authorized representative of that business.
Form 1919 no longer asks for entity ownership information as it previously did in Section III. The final part of the form contains certifications you must agree to in submitting the form. Be sure to read each certification carefully before signing the form.
An electronic signature will not be accepted on the form, so please sign either with a wet signature or through DocuSign. The signature must come from an authorized representative of the business within 90 days of the form’s submission.