We’ll discuss what the SBA Form 1920 is, who is responsible for filling it out, what the form involves, and how it’s submitted.
What Is SBA Form 1920?
The SBA Form 1920 provides the SBA with information about the lender, the borrower, and the loan itself—as well as details about compliance with the 7(a) loan program requirements. While the form must be filled out by the lender of any 7(a) loans, the borrower will need to provide much of the information required. The SBA typically doesn’t directly lend the money itself, but instead makes it easier for small businesses to obtain funding by helping to facilitate the loans, thereby reducing the risk for lenders and making capital more accessible.
Who Fills Out SBA Form 1920?
If you apply for a 7(a) loan, you’ll need to fill out SBA Form 1919 and give it to your SBA-associated lender. This form requests details about your personal and business information and financial standing, loan specifics, and more. While your lender is actually responsible for completing SBA Form 1920, it’s helpful for you to be familiar with this form as well—you’ll need to supply a lot of the necessary information.
What’s on SBA Form 1920?
For all loans, lenders must fill out sections A, B, C, D, E, G, H, I, J, K, L, M, and U. We’ll walk through a brief overview of these sections so you can familiarize yourself with the information your lender will need to complete the paperwork. Depending on the project and delivery method, your lender may need to fill out additional sections as well.
Part A: Loan Processing Options
The first section of SBA Form 1920 addresses whether the processing method is delegated or non-delegated, and which type of 7(a) loan the borrower is applying for.
Part B: Lender Information
This part of the form requests basic information about the lender such as name, location, and contact details.
Part C: Small Business Applicant Information
This section consists of two different parts:
Part D: Structure Information
Part D of the form includes information about the loan itself, including the requested loan amount, guaranty percentage, terms of the loan, payment frequency, rate structure, and other financial details. There is space for multiple rates to allow for different structures for guaranteed and unguaranteed portions of the loan.
Part E: Complete Project Information
This section categorizes what the funds will be used for, how much of the money will come from an SBA 7(a) loan, how much from other financing, and how much will be an injection of applicant equity. Categories of proceed use include options such as land acquisition, construction, purchasing inventory, and working capital, among other divisions.
Part G: General Eligibility
Section G addresses a business’s eligibility for an SBA guaranty on a loan. With noted exceptions, the SBA requires the applicant to be an operating business, structured for profit, located in the U.S. or its territories or possessions, meet the SBA size standards, and have the ability to demonstrate a need for the funds.
Part H: Credit Not Reasonably Available Elsewhere
This portion of the form confirms that the applicant is unable to access credit from non-federal, non-state, and non-local government sources. It also includes information about the lender’s credit memo and credit elsewhere analysis.
Part I: Required Guarantors
This part of the form covers the lender’s verification that all owners with 20% or more interest in the applicant will guarantee the loan, along with other guarantor specifics.
Part J: Character Determination
Section J asks questions about the character of the business’s ownership and details of any criminal history or charges.
Part K: Citizenship
This is a short portion of the form intended to determine an applicant’s citizenship. The form states that qualified businesses must have a minimum of 51% ownership and control by U.S. citizens and/or individuals with lawful permanent resident status that’s verified with the USCIS, among other specifics.
Part L: Prior Loss to Government/Delinquent Federal Debt
Part L covers information related to any previous defaults on federal loans or assisted financing by the applicant or other businesses related to the applicant. It also addresses delinquency on nontax debt to the federal government, among other details.
Part M: Size Analysis
This section is about determining if the applicant and its affiliates can be categorized as small. It asks for information about industry, average annual receipts, number of employees, and tangible net worth, along with other data necessary to distinguish size.
Part U: 7(a) Small Loan
This portion of the form addresses credit score information, as well as what information should be included in the lender’s credit memo (e.g., summary of business history and management, a description of collateral and its estimated value, and other loan specifics). There is also a section for details regarding SBA Community Advantage loans, which focus on underserved communities and provide loans of $250,000 or less.
How To Submit Form 1920
Both delegated and non-delegated lenders must complete, sign, and date the form, and keep it in loan file. Non-delegated lenders must also submit Form 1920 electronically to the Loan Guaranty Processing Center (LGPC). A note at the bottom of Form 1920 estimates that the burden for completing the form—including the review of instructions, gathering of data, form completion, and review—to be about 25 minutes per response.
