The U.S. Small Business Administration (SBA) announced on Mar. 10 a new policy that prohibits foreign nationals and non-citizens from receiving SBA-guaranteed small business loans. The updated policy extends to the agency’s Surety Bond and Microloan programs, following a recent change that made businesses owned in whole or in part by foreign nationals ineligible for the flagship 504 and 7(a) loan programs.
This move is significant as it restricts access to federal small business financing exclusively to U.S. citizens or U.S. nationals whose principal residence is in the United States. The SBA said this decision comes amid record demand for capital and limited lending authority set annually by Congress.
SBA Administrator Kelly Loeffler said, “Last month, we made it clear that SBA would not allow foreign nationals to access our core small business loan programs – we are expanding that policy to include all SBA-guaranteed loans. 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 small businesses partially owned by lawful permanent residents, which represented about four percent of its total of 85,000 loan approvals during that period. The new policy will take effect thirty days after publication.
The latest measure builds on previous reforms under Administrator Loeffler aimed at supporting American small business owners. Last year, the agency implemented citizenship verification across its loan programs to prevent illegal aliens from obtaining loans. Additionally, efforts were announced to relocate SBA field offices out of sanctuary cities that do not comply with U.S. Immigration and Customs Enforcement requirements.
