The US Small Business Administration has announced a new policy that will prevent foreign nationals and non-citizens from accessing SBA-guaranteed small business loans.
The change, issued Monday by SBA Administrator Kelly Loeffler, will apply to all major SBA lending programmes.
Under the revised rule, only US citizens and US nationals living in the United States, its territories or possessions will be eligible to apply for SBA-backed loans.
The restriction will apply to key federal loan programmes including the 7(a), 504, Microloan, and Surety Bond schemes.
Foreign ownership makes businesses ineligible
According to the SBA, any company with ownership by a foreign national—including lawful permanent residents, commonly known as green card holders—will be considered ineligible for these federal loan programmes.
The agency said the policy aims to prioritise American citizens and job creators. Loeffler noted that SBA lending authority is capped annually by Congress and demand for small business financing is high.
Because of those limits, she said, the available funds should be directed first toward US citizens.
Tightening eligibility rules
The new rule builds on earlier restrictions introduced earlier this year. In February 2026, the SBA updated its guidance to require that 100% of the direct and indirect owners of a business applying for a loan must be US citizens or nationals.
This replaced earlier provisions that allowed businesses with limited foreign ownership to qualify.
SBA data shows that about 3,300 loans approved in fiscal year 2025 went to businesses partly owned by lawful permanent residents or foreign nationals. Those approvals represented roughly 4% of all SBA loans that year.
Criticism from lawmakers
The rule will take effect 30 days after publication, meaning applicants will need to meet the updated citizenship requirements within that timeframe.
Some lawmakers and critics argue the policy could harm immigrant entrepreneurs who contribute significantly to the US economy. They say excluding lawful permanent residents and other non-citizens from federal loan programmes may limit business creation and job growth in many communities across the country.
