How To Complete SBA Form 1920

Learn why the form is important for both borrowers and lenders

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The 7(a) loan program is the most common loan program offered by the U.S. Small Business Administration (SBA) and provides financial assistance to qualifying small businesses. If you’re applying for an SBA loan through the agency’s 7(a) loan program, you’ll need to submit SBA Form 1919 to your lender. Your lender, however, is required to fill out SBA Form 1920, which provides the SBA with details about eligibility, loan terms, what the proceeds will be used for, and the applicant’s history of job creation and/or retention.

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.

Key Takeaways

  • If you’re applying for an SBA loan with the 7(a) loan program, you will need to fill out SBA Form 1919; your lender will need to fill out SBA Form 1920 as part of the application.
  • SBA Form 1920 gives the SBA a snapshot of crucial information, with important details about the lender, the applicant, and the loan itself.
  • While SBA Form 1920 is filled out by your lender, you should also familiarize yourself with the form, because you’ll need to provide your lender with much of the requested information.

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.

Visit the SBA’s website to learn more about the steps involved in getting an SBA loan.

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.

The SBA provides helpful information about the different types of 7(a) loans available, so you can learn which one is the best fit for your business.

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:

  1. The first part requests information if the applicant is arranged as an Eligible Passive Company (EPC) for this project.
  2. The second section in Part C includes details about the small business applicant: How long the company has been operating for, its legal structure, when it was established, job creation or retention relevant to the loan, and other basic information.

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.

Expert Tip: Tip

Head over to the SBA’s website to familiarize yourself with Form 1920 so that you’ll be prepared to provide your lender with all the details they need to complete the form.

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.

The lender must also state that the applicant is an eligible business, and that its goods and/or services are available to the public.

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.

Frequently Asked Questions (FAQs)

How hard is it to get an SBA 7(a) loan?

The SBA typically has higher eligibility standards and requires more documentation, which can lead to a longer approval process. To be eligible for an SBA 7(a) loan, businesses must meet the agency’s requirement criteria. You can learn more about the terms, conditions, and eligibility of 7(a) loans on the SBA’s website.

What is the maximum SBA 7(a) loan amount?

Depending on the specific 7(a) loan program—Small or Express, for example—the maximum amount ranges from $350,000 to $500,000, respectively. The largest maximum loan amount,  however, is $5 million, which can be accessed through the SBA’s 7(a) Standard loan program.

What is the maximum term on an SBA 7(a) loan?

SBA loans have maximum maturities of 25 years for real estate, 10 years for equipment, and 10 years of working capital or inventory loan. Loan maturities are based on the business’s ability to repay, the purpose of the loan, and the useful life of the business assets financed.

Article Sources

  1. U.S. Small Business Administration. “7(a) Loans.”

  2. U.S. Small Business Administration. “SBA Form 1920.”

  3. U.S. Small Business Administration. “Types of 7(a) Loans.”

  4. U.S. Small Business Administration. “Terms, Conditions, and Eligibility.”