The US Small Business Administration (SBA) has announced a new policy that will prevent foreign citizens and non-citizens from obtaining small business loans guaranteed by the SBA. The change was released Monday by SBA Administrator Kelly Loeffler, and will apply to all SBA loan programs, including major lending programs and smaller support programs.Under the new policy, only US citizens and US nationals living in the United States, its territories or possessions will be eligible to apply for SBA-backed loans. This includes major loan programs such as 7(a) and 504 programs, microloans, and surety bonds. Any business owned by a foreign national, including lawful permanent residents (green card holders), will be deemed ineligible for these federal loans.The SBA says the policy is designed to prioritize American citizens and job creators. Agency Director Loeffler said the agency’s lending authority is capped each year by Congress, and given the high demand for small business capital, the limited funds must first go to U.S. citizens.The policy change builds on previous rules that already tightened eligibility.
In February 2026, the SBA updated its guidance to require that 100% of the direct and indirect owners of small businesses applying for a loan be U.S. citizens or nationals, removing previous allowances for businesses that had minor foreign ownership.
According to SBA figures, about 3,300 loans approved in fiscal year 2025 were to businesses partially owned by lawful permanent residents and foreign nationals. These represented approximately 4 percent of total SBA loan approvals that year.The policy’s effective date is set to be 30 days after its publication, meaning affected applicants will have to meet the revised citizenship requirements by then.Some lawmakers have criticized the shift, saying it would hurt immigrant entrepreneurs who contribute to the American economy. Opponents argue that excluding lawful permanent residents and other non-citizens from federal small business loans could reduce opportunities for business creation and job growth in communities across the country.
