The U.S. Small Business Administration (SBA) has announced a new policy that will prohibit foreign nationals and non-citizens from accessing SBA-guaranteed small business loans. The policy, announced March 9, expands earlier restrictions and is intended to ensure that federal lending programs prioritize American citizens.
Under the updated rules, applicants for SBA loan programs must be U.S. citizens or U.S. nationals whose principal residence is in the United States. The change applies to the agency’s microloan and surety bond programs and builds on a policy implemented earlier this month that made businesses owned wholly or partially by foreign nationals ineligible for the SBA’s 504 and 7(a) loan programs.
The microloan program provides financing of up to $50,000 through approved third-party intermediaries to help small businesses start or expand operations. The SBA’s surety bond program helps new or small contractors obtain bonding needed to bid on certain government projects.
According to the agency, the expanded policy reflects growing demand for access to SBA-backed capital and the limited lending authority allocated by Congress. The SBA said the change is intended to ensure that federally supported financing programs are directed toward American citizens building businesses and creating jobs in the United States.
The policy will take effect 30 days after the announcement.
In fiscal year 2025, the SBA approved 3,358 loans for businesses owned in part by lawful permanent residents, representing about 4% of the agency’s roughly 85,000 loan approvals. The agency said the new policy is part of broader efforts to prioritize access to capital for U.S. citizens.