New SBA Policy Prohibits Foreign Nationals from Accessing Small Business Loans

The US Small Business Administration (SBA) has instituted a new policy that restricts foreign nationals and non-citizens from obtaining loans backed by the SBA. This modification was announced by SBA Administrator Kelly Loeffler on Monday and will take effect 30 days after its publication. The policy encompasses all SBA loan programs, which include significant lending options as well as smaller support initiatives.

According to the updated regulations, eligibility for SBA-backed loans will be limited exclusively to US citizens and US nationals residing within the United States and its territories. This ruling affects key loan programs such as the 7(a), 504, Microloan, and Surety Bond initiatives. Any business that is partly or wholly owned by a foreign national, including lawful permanent residents, or green card holders, will be deemed ineligible for these federal loans.

The SBA has indicated that the motivation behind this change is to prioritize American citizens and job creators. Administrator Loeffler underscored that Congress sets an annual cap on the agency’s lending authority. Given that the demand for small business loans remains high, the limited resources should be allocated primarily to US citizens.

This new policy builds upon previous regulations that had already tightened eligibility criteria. In February 2026, the SBA amended its guidance to necessitate that all direct and indirect stakeholders in a small business applying for a loan must be US citizens or nationals, eliminating prior provisions that allowed for a minority share of ownership held by foreign individuals.

Data from the SBA reveals that approximately 3,300 loans granted in the fiscal year 2025 were for businesses with partial ownership by lawful permanent residents or other foreign nationals. These loans amounted to about 4 percent of the total SBA loan approvals for that period.

The revised policy’s implementation timeline means that applicants must adhere to the new citizenship requirements by the designated effective date. Some lawmakers have voiced concerns over the potential negative impact of this change, suggesting that it could hinder immigrant entrepreneurs who play a significant role in the US economy. Critics assert that barring lawful permanent residents and other non-citizens from accessing federal small business loans may limit prospects for business development and job creation across various communities in the nation.

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