Washington, March 10 (IANS) The US Small Business Administration (SBA) has announced a new policy barring foreign nationals and non-citizens from accessing federally backed small business loans, saying the move is aimed at prioritising American entrepreneurs amid rising demand for capital.
The policy expands earlier restrictions and will apply across multiple SBA-guaranteed lending programmes, including the agency’s Surety Bond and Microloan programmes. Under the updated rule, applicants must be US citizens or US nationals whose principal residence is in the United States.
“The Trump SBA is committed to driving economic growth and job creation for American citizens,” SBA Administrator Kelly Loeffler said.
The decision builds on a policy shift introduced earlier this month that already made businesses owned wholly or partly by foreign nationals ineligible for the agency’s flagship 504 and 7(a) loan programmes.
“Last month, we made it clear that SBA would not allow foreign nationals to access our core small business loan programs – and today, we are expanding that policy to include all SBA-guaranteed loans,” Loeffler said.
“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 prioritise American citizens who are building businesses and creating jobs here at home.”
According to SBA data, the agency approved 3,358 loans in Fiscal Year 2025 for businesses owned partly by lawful permanent residents or Green Card holders. Those approvals represented about four percent of the agency’s roughly 85,000 loan approvals that year.
Officials said the new policy reflects the administration’s view that the SBA’s federally backed loan capacity should be reserved primarily for American citizens given the growing demand for financing.
The updated policy will take effect 30 days after publication.
Separately, the agency has also tightened citizenship verification procedures for its lending programmes. Officials say the changes are intended to ensure that SBA funding does not go to individuals who are not authorised to receive such federal assistance.
A formal policy notice issued by the SBA states that the agency has revised its loan programme rules so that “100 per cent of all direct and/or indirect owners of a small business applicant be US Citizens or US Nationals who have their Principal Residence in the United States, its territories, or possessions.”
The notice also rescinds an earlier provision that allowed a borrower to have up to five percent ownership held by foreign nationals or individuals living outside the United States. It further specifies that lawful permanent residents will no longer be eligible to hold any ownership interest in a business applying for SBA-backed financing.
The SBA said the new rules are part of a broader set of reforms aimed at ensuring that the agency’s programmes benefit American small business owners first. Among the steps announced previously are stronger citizenship verification checks across loan programmes.
The agency has also said it plans to relocate certain field offices from jurisdictions described as sanctuary cities that do not cooperate with US Immigration and Customs Enforcement (ICE).
The Small Business Administration is the federal agency responsible for supporting small businesses through loan guarantees, counselling and contracting assistance. Its flagship 7(a) and 504 programmes help businesses obtain financing through private lenders.
--IANS
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