New SBA rule bans foreigners, non‑citizens from taking small business loans; takes effect in 30 days

The US Small Business Administration (SBA) has announced a new policy that will bar foreign nationals and non‑citizens from accessing SBA‑guaranteed small business loans. The change was issued on 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 who live in the United States, its territories, or possessions will be eligible to apply for SBA‑backed loans. This includes key loan programs such as the 7(a), 504, Microloan, and Surety Bond programs. Any business that has ownership by a foreign national, including lawful permanent residents (green card holders), will be considered ineligible for these federal loans.The SBA says the policy is designed to prioritize American citizens and job creators. Administrator Loeffler stated that the agency’s lending authority is capped each year by Congress, and because demand for small business capital is high, the limited funds should first go to US citizens.The policy change builds on earlier rules that were already tightening eligibility.In February 2026, the SBA updated its guidance to require that 100% of the direct and indirect owners of a small business applying for a loan be US citizens or nationals, removing earlier allowances for businesses that had minor foreign ownership.According to SBA figures, about 3,300 loans approved in fiscal year 2025 were for businesses partly owned by lawful permanent residents and foreign nationals. These represented roughly 4 per cent of total SBA loan approvals that year.The policy’s effective date is set to be 30 days after publication, meaning affected applicants will have to meet the revised citizenship requirements by that time.The shift was criticised by some lawmakers who say it will hurt immigrant entrepreneurs who contribute to the US 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.