SBA rules · SOP 50 10 8.1

What is CAIVRS and how does it affect an SBA loan?

CAIVRS (Credit Alert Verification Reporting System) is a federal database that lenders must search to determine whether an applicant, guarantor, or Associate is ineligible for an SBA loan due to a Prior Loss to the federal government or Delinquent Federal Debt.

Quoted from SBA SOP 50 10 8.1Every quote checked word for word

In detail

Prior Loss ineligibility: An applicant is ineligible if the applicant, or any business owned, operated, or controlled by the applicant or an Associate, previously defaulted on a federal loan or federally assisted financing resulting in a loss to the federal government.
Delinquent Federal Debt ineligibility: An applicant is ineligible if the applicant or any guarantor, excluding supplemental guarantors, owes an outstanding delinquent nontax debt to the federal government.
Satisfied obligations: If a prior loss or delinquent federal debt is fully satisfied, the loan application can be processed, including under delegated authority, provided the lender documents the file on how the debt or loss was satisfied.
Reporting consequence: Lenders must inform applicants that defaulting on an SBA-guaranteed loan resulting in a loss or delinquent debt will cause the business, guarantors, and controlling Associates to be listed in CAIVRS, which may affect their eligibility for future federal financial assistance.

The source

What the SOP says

“All SBA Lenders must check the Credit Alert Verification Reporting System (CAIVRS), to determine if the Applicant is ineligible for a 7(a) or 504 loan because the Applicant or a business owned, operated, or controlled by the Applicant or any of its Associates has a Prior Loss.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > NOTE (lines 485-490)✓ Verified

“If a Prior Loss to the Government is fully satisfied, the application can be processed, including under an SBA Lender’s delegated authority. The SBA Lender must document its file as to how the loss has been fully satisfied.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > NOTE (lines 485-490)✓ Verified

“An Applicant is not eligible for a 7(a) or 504 loan if the Applicant or any guarantor (except a Supplemental Guarantor) owes an outstanding nontax debt to the Federal Government, or any agency thereof, that is in delinquent status (hereafter referred to as “Delinquent Federal Debt”).

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > Delinquent Federal Debt (lines 496-500)✓ Verified

“SBA Lenders must check the Credit Alert Verification Reporting System (CAIVRS), to determine if the Applicant is ineligible for a 7(a) or 504 Loan because the Applicant, or any guarantor or Associate of the Applicant, has any Delinquent Federal Debt.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > NOTE (lines 506-511)✓ Verified

“If a Delinquent Federal Debt is fully satisfied, the application can be processed, including under an SBA Lender’s delegated authority. The SBA Lender must document its file as to how the debt has been fully satisfied.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > NOTE (lines 506-511)✓ Verified

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