WASHINGTON, D.C. — The U.S. Small Business Administration announced a new policy this past week that will prevent foreign nationals and non-citizens from receiving SBA-guaranteed small business loans, expanding eligibility restrictions across several federal lending programs.
What This Means for You
- Only U.S. citizens or U.S. nationals with a primary residence in the United States will be eligible for SBA loan programs.
- The restriction now applies to additional programs, including the Microloan and Surety Bond programs.
- The policy will take effect 30 days after publication.
The change expands a policy implemented earlier this month that made businesses owned wholly or partially by foreign nationals ineligible for the SBA’s flagship 7(a) and 504 loan programs.
Expanded Restrictions on Loan Eligibility
Under the updated policy notice, businesses applying for SBA-guaranteed loans must be owned by U.S. citizens or U.S. nationals whose principal residence is in the United States.
The new rule now applies to the agency’s Microloan Program, which provides smaller loans to help start or expand businesses, and the Surety Bond Program, which helps small contractors obtain bonding required for certain construction projects.
SBA officials said the policy was adopted as part of broader efforts to prioritize domestic business ownership when allocating federally backed lending.
SBA Cites Limited Lending Authority
SBA Administrator Kelly Loeffler said the agency is focusing its lending programs on American citizens due to limited lending authority set by Congress and increased demand for small business financing.
“The Trump SBA is committed to driving economic growth and job creation for American citizens,” Loeffler said. “With our lending authority capped annually by Congress and amid record demand for access to capital, our responsibility is clear: the limited resource of SBA financing must prioritize American citizens who are building businesses and creating jobs here at home.”
According to the agency, in fiscal year 2025 the SBA approved 3,358 loans for businesses owned in part by lawful permanent residents. That represented about 4 percent of the approximately 85,000 loans approved through SBA programs during the year.
Implementation Timeline
The policy will take effect 30 days after publication of the notice, according to the SBA.
The agency said the change is part of a broader series of administrative actions affecting its lending programs.
Related SBA Policy Changes
SBA officials said the new rule builds on earlier measures aimed at tightening eligibility requirements for the agency’s loan programs.
Last year, the SBA implemented citizenship verification procedures across its loan programs to prevent individuals without legal status from receiving federally backed loans.
The agency has also announced plans to relocate certain field offices from jurisdictions described as sanctuary cities, which officials said could affect cooperation with federal immigration enforcement.
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