The US Small Business Administration (SBA) has implemented a new policy preventing foreign nationals and non-citizens from accessing federally backed small business loans. This decision aims to prioritize American entrepreneurs due to the increasing demand for capital. The policy extends previous restrictions and covers various SBA-guaranteed lending programs, including the Surety Bond and Microloan initiatives.
SBA Administrator Kelly Loeffler emphasized the commitment to driving economic growth and job creation for American citizens. This move builds upon a recent policy change that rendered businesses owned by foreign nationals ineligible for the agency’s key loan programs. The updated rule mandates that applicants must be US citizens or US nationals residing primarily in the United States.
The agency’s data reveals that in Fiscal Year 2025, about four percent of the SBA’s roughly 85,000 loan approvals were for businesses partially owned by lawful permanent residents or Green Card holders. The new policy underscores the administration’s stance that SBA’s federally backed loan capacity should primarily benefit American citizens, given the surge in financing demands. The revised policy will become effective 30 days after publication.
The SBA has also enhanced citizenship verification procedures for its lending programs to ensure that federal assistance reaches only authorized individuals. The agency’s formal policy notice specifies that all direct and/or indirect owners of a small business applicant must be US citizens or US nationals with their principal residence in the US, its territories, or possessions. Additionally, the updated rules eliminate the provision allowing up to five percent ownership by foreign nationals or individuals residing outside the US.
