The Small Business Administration has finally made official its crackdown on small business investors, and it’s not as sweeping as some involved with SBA-guaranteed loans had feared.

Forbes reported in March that the SBA had quietly begun rejecting loan guarantees for businesses if any of their owners or investors–even a passive investor–had previously backed a business that defaulted on an SBA-guaranteed loan. Then, and subsequently, the SBA didn’t respond to Forbes’ requests that it confirm or clarify the policy change, which seemed to be a dramatic expansion of the traditional rule: If a deal goes bad, only the borrower who signed the personal guarantee is barred from future SBA and other government-backed loans.

Finally, yesterday, the SBA issued a two-page guidance document that set out its new standard, and it appears the crackdown isn’t as sweeping as some experts had feared. But the SBA still left itself plenty of wiggle room, setting up a case-by-case review process for investors who meet certain standards.

“The news, and the big splash is, it’s not an automatic ‘no,’” said Lynn Ozer, president of Pennsylvania-based MultiFunding LLC, an SBA loan brokerage. “They’re really talking specifically about these non-controlling minority equity investors. So it’s a very, very slim definition and they’re leaving themselves open to be able to decide at their discretion whether or not (a given investor) deserves to be part of another SBA loan.”

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