SBA eligibility screening that finds every owner and affiliate in the documents, before underwriting starts
Every owner checked before underwriting starts, findings that hold up.
See one case, screen by screen ↓Software that tests an SBA loan applicant against the program’s eligibility rules before credit underwriting starts: business type, size with affiliates, ownership and citizenship, government records and loan limits. SBA Eligibility Screening reads the whole application package, traces every owner to 100% and hands the SBA underwriter a cited checklist to sign.
How to choose AI solutions for lending →
Updated
Since 1 June 2025 the eligibility determination is the lender’s again under SOP 50 10 8, and 100% of direct and indirect ownership goes into E-Tran. Since 1 March 2026, under Procedural Notice 5000-876626, every direct and indirect owner must be a U.S. citizen or national with a U.S. principal residence — one ineligible owner at any level makes the loan ineligible.
So before credit work starts, the SBA underwriter reads the operating agreement and every amendment, the owner entities’ agreements, K-1s and Forms 1919 and 413, runs CAIVRS for every 20%+ owner and guarantor, checks OFAC and SAM.gov, looks up the size standard and asks for the affiliates’ returns. The application only asks who owns the applicant, not what the owners own — and an affiliate behind a holding company is the kind of miss that surfaces when the lender asks SBA to honour the guaranty.
Estimated split for one 7(a) application with a holding-company owner, by hand and with the solution.
Six specialist agents trace every owner and affiliate and run every SBA test; the SBA underwriter decides and signs.
Copperline Mechanical, a commercial HVAC and plumbing contractor in Columbus, Ohio, asks Quillfield Community Bank for an SBA 7(a) loan of $3,850,000. The package of 41 documents was complete on Thursday. Here is Monday morning, screen by screen, in the working solution.
Alicia opens the next file to screen on its ownership tree: Copperline Mechanical, NAICS 238220, 64 employees. As filed, three owners — Dana Whitfield 40%, Ridgeway Trades Holdings 35%, Tomas Varga 15% — and a dashed node for the rest.
“10% not accounted for · The application adds to 90% · Who holds it? Not on the form”
Amendment No. 2 to the operating agreement, §3.1, admitted Keystone Field Partners, LLC with 10% on 15 Jan 2026 — not on the application. Ridgeway Holdings’ Schedule A adds Marcus Ridgeway (21.0% indirect) and Elena Ridgeway (14.0%); Keystone’s agreement adds Luis Ortega, Priya Nair and Owen Becker. The strip under the tree now adds to 100%.
Never adds an owner without a document, never assumes a percentage.
A new node appears under the 35% owner: Ridgeway Plumbing & Drain, Inc., 70% owned by Ridgeway Holdings, in the same subsector 238. It is an affiliate under 13 CFR 121.301(f)(1), and its receipts count toward Copperline’s size. Whitfield Excavating and Ridgeway Rentals are tested too, and are not affiliates.
“Affiliate found in Ridgeway Holdings’ 2025 partnership return · Combined receipts $21.18M — over the $19.0M size standard for NAICS 238220”
Alicia clicks the callout and the holding company’s 2025 Form 1065, Schedule B opens at question 3b: Ridgeway Plumbing & Drain, Inc., US, 70%. Package document 19 of 41 — a page from the owners’ own filings, not the borrower’s answers.
Group receipts of $21.18M top the $19.0M industry standard, so the alternative size standard runs: tangible net worth $6.65M against $20M, two-year average net income after tax $1.89M against $6.5M. The affiliate’s $420,000 7(a) counts too — group SBA exposure is $4.27M of the $5M limit.
“A 7(a) applicant may use either test; with its affiliates it must stay under both limits.”
Alicia switches the test lens to CAIVRS and the tree fades to the people it screens: Dana Whitfield, clear on 9 Oct, and one red node — Marcus Ridgeway, 21.0% through the holding company and a guarantor. HUD reports an FHA single-family claim, case 412-883107, from 2021. His Form 1919 answered “No” to the federal-debt question.
Never clears a hit without the agency’s clearance.
Twenty-two tests in five groups — business, size, ownership, government records and the loan — each with its result, the rule (13 CFR 120.110, 121.301(b), SOP 50 10 8, PN 5000-876626) and the source page. Nineteen pass; three are to clear before credit underwriting starts.
A corrected ownership schedule with Keystone and certifications from it and its three members; HUD clearance and a corrected Form 1919 for Marcus Ridgeway; Elena Ridgeway’s citizenship and residency certification. The request to Dana Whitfield is drafted and sent only when Alicia sends it, with Chris Halloran copied.
“Before credit underwriting can start, SBA rules need three more items.”
Dana uploads six documents on Wed 14 Oct, including HUD’s letter of 13 Oct. The agents re-test: 22 of 22 pass. Alicia signs the eligibility determination, Margaret Ellery takes the second look on the cleared CAIVRS hit, and Danny Cho certifies 100% of direct and indirect ownership in E-Tran.
Signature meaning: “I have reviewed the documents and find the applicant eligible under SOP 50 10 8 and Procedural Notice 5000-876626.”
Eleven applications, $22.45M requested. Ninebark Veterinary Group has a 12% owner whose principal residence is in Ontario; Granite Run Logistics’ group SBA exposure is $5.62M, over $5M; Harlan Street Brewing and Lakeshore Orthopedic Rehab are ready to sign.
The same application, seen by the five people who carry it — in their own words, and what their week looks like now.
Six specialist agents trace every owner and affiliate and run every SBA test; the SBA underwriter decides and signs.
Reads articles, operating agreements and every amendment, owner entities’ agreements and K-1s, and traces ownership to 100%, direct and indirect — then reports every owner the application leaves out, with the document and page.
Checks each person’s citizenship and residency certification, ID, principal residence and Forms 1919 and 413, and reports anyone without a certification or any answer that conflicts with another document.
Runs CAIVRS for the business and every 20%+ owner and guarantor, OFAC and SAM.gov exclusions, and looks for prior SBA losses.
Applies 13 CFR 121.301 to every business an owner holds, then the industry and alternative size standards and the group’s SBA exposure.
Tests ineligible business types, use of proceeds, owner occupancy, credit elsewhere, franchise and loan limits.
Writes the eligibility checklist one line per test with its result, rule and document, the items that clear each failed test, and the request to the borrower in plain words.
Decides and signs; compliance officer takes a second look at cleared hits. The agents propose; a named person decides.
The underwriter can ask in plain words — or tell it what to request. Every answer points to the document it rests on.
Who owns Copperline Mechanical, direct and indirect?
Nine owners make up 100% — the application lists three and 90%. Dana Whitfield 40.0%; Marcus Ridgeway 21.0% and Elena Ridgeway 14.0% through Ridgeway Holdings; Tomas Varga 15.0%; Keystone Field Partners 10.0% — Luis Ortega, Priya Nair, Owen Becker. Keystone came in by Amendment No. 2 on 15 Jan 2026.
Why is Ridgeway Plumbing & Drain an affiliate, and are we still small?
No owner holds more than 50% of Copperline, so the 20% rule applies: Ridgeway Trades Holdings holds 35% of Copperline and 70% of Ridgeway Plumbing & Drain, both in subsector 238. Together their five-year average receipts are $21.18M, over the $19.0M standard. Under the alternative standard the group is small: tangible net worth $6.65M against $20M and average net income $1.89M against $6.5M. Group exposure is $4.27M of $5M.
What does the CAIVRS hit on Marcus Ridgeway mean?
CAIVRS shows a HUD claim on FHA case 412-883107, reported in 2021. Marcus holds 21.0% through Ridgeway Holdings and guarantees the loan, so the application is ineligible until HUD clears it. His Form 1919 says “No” to the federal-debt question — that needs correcting too.
Request the three items to clear from Dana Whitfield
Sent to Dana Whitfield, with Chris Halloran copied: the ownership schedule with Keystone and certifications from Keystone and its 3 members; HUD clearance and a corrected Form 1919 for Marcus Ridgeway; Elena Ridgeway’s citizenship and residency certification. The forms are attached for electronic signature. I will re-test the moment they arrive.
13 screens from the working solution, on its sample data. Pick one to see it large.
Who certifies, who is screened, how size is tested and who signs — each a setting, versioned and on the audit trail.
| Setting | Default | Choose from |
|---|---|---|
| Citizenship and residency certification | 100% of direct and indirect owners | 100% of direct and indirect owners · Owners of 5% or more · Owners of 20% or more |
| Who completes Form 1919 | 20%+ owners, officers, directors, key employees | 20%+ owners, officers, directors, key employees · 20%+ owners only |
| Look-back for ineligible owners | 6 months before the loan number is issued | Set in months |
| Who CAIVRS screens | Business, 20%+ owners and guarantors | Business, 20%+ owners and guarantors · Business and every owner · Business only |
| Size test order | Industry standard, then alternative standard | Industry standard, then alternative standard · Industry standard only · Alternative standard first |
| SBA exposure limit, across every affiliate | $5,000,000 (7(a)) | $5,000,000 (7(a)) · $5,500,000 (504 manufacturing) |
| Owner occupancy | 51% existing building · 60% new construction | 51% existing building · 60% new construction · Business occupies 100% |
| Second look on cleared issues | Margaret Ellery, SBA compliance officer | Margaret Ellery, SBA compliance officer · Rob Keane, SBA Lending Manager |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample application data · “target” = the design goal, measured in the live solution · “estimated” = our estimate, including the by-hand baseline · “typical” = published figures (SBA FY25 lending release — 77,600 7(a) loans; Coleman Report on SBA OIG Report 26-07 — 73,302 loans flagged for an eligibility review at guaranty purchase). Rules cited: SOP 50 10 8 (1 Jun 2025), Procedural Notice 5000-876626 (1 Mar 2026), 13 CFR 121.301 and 120.110. People, companies and the bank named on this page are fictional — characters and sample data in the working solution.
Software that tests an SBA loan applicant against the program’s eligibility rules before credit underwriting starts: business type, size with affiliates, ownership and citizenship, government records and loan limits. SBA Eligibility Screening reads the whole application package, traces every owner to 100% and hands the SBA underwriter a cited checklist to sign.
The entity document reader reads the operating agreement and every amendment, the owner entities’ own agreements and the K-1s, and multiplies through to indirect percentages until every branch ends in a person. It compares the result with the ownership the application declares and reports each owner left out, with the document and page — in the example, a 10% owner admitted by Amendment No. 2.
Every business an owner holds becomes a node on the tree, found in the owners’ own filings, and is tested under 13 CFR 121.301(f). Affiliates’ receipts are added over five completed fiscal years and compared with the industry standard; if the group is over, the alternative size standard runs on tangible net worth and average net income. Affiliates’ SBA loans count toward the group’s exposure limit.
Yes. The government records checker runs CAIVRS for the business and every 20%+ owner and guarantor, and checks OFAC and SAM.gov exclusions for every owner, officer and related business, at screening and again at closing. A hit is never cleared without the agency’s clearance.
The rule library holds each rule with its effective date and status, and watches sba.gov notices and the Federal Register. A file is tested against the rules in force when its loan number is issued; a proposed rule, such as the size standards overhaul, is watched and not applied.
No. The agents recommend; the SBA underwriter decides and signs the eligibility determination. The compliance officer takes a second look at any cleared CAIVRS, OFAC or Form 1919 issue, and the processor certifies ownership in E-Tran only after both.
Yes. Who must certify citizenship and residency, who completes Form 1919, the look-back, CAIVRS scope, size test order, exposure limit, owner occupancy and who signs and takes the second look are all settings, versioned and on the audit trail.
The Agentic Solution Engine builds and deploys it from your requirements — your SBA credit policy, checklist and a sample of past application packages — and it goes live once every quality gate has passed. We will walk you through it on your own applications first.
Rule answers in seconds, cited to the SOP on the loan's date.
1-min demoSmall Business Loan DecisioningA decision-ready file for loans up to $350,000 in under a day.
1-min demoBusiness Loan Application PortalComplete applications the first time, without days of document chasing.
1-min demoWe’ll run SBA Eligibility Screening on a sample of your own application packages.