Washington, March 10 (NationPress) The US Small Business Administration (SBA) has unveiled a new regulation that prohibits foreign nationals and non-citizens from obtaining federally backed small business loans. This initiative is designed to prioritize American entrepreneurs in light of increasing capital demands.

The new policy broadens existing restrictions and will be enforced across various SBA-guaranteed lending programs, including the agency’s Surety Bond and Microloan initiatives. According to the revised guidelines, only applicants who are US citizens or US nationals with their primary residence in the United States will qualify.

“The Trump SBA is dedicated to fostering economic growth and job creation for American citizens,” stated SBA Administrator Kelly Loeffler.

This decision builds on a recent policy change from earlier this month that rendered businesses wholly or partially owned by foreign nationals ineligible for the SBA’s primary 504 and 7(a) loan programs.

“Last month, we made it clear that SBA would not permit foreign nationals to access our primary small business loan programs – and today, we are extending that policy to encompass all SBA-guaranteed loans,” Loeffler added.

“Given that our lending authority is capped annually by Congress, and with record demand for capital, our duty is evident: the limited resource of SBA funding must be allocated to American citizens who are establishing businesses and creating jobs domestically.”

Data from the SBA reveals that during Fiscal Year 2025, the agency approved 3,358 loans for businesses partly owned by lawful permanent residents or Green Card holders, making up around four percent of the approximately 85,000 loan approvals that year.

Officials indicated that the new policy reflects the administration’s stance that the SBA’s federally backed loan capacity should primarily serve American citizens, especially with the increasing demand for financing.

This updated policy will take effect 30 days following its publication.

Additionally, the agency has tightened procedures for verifying citizenship within its lending programs. Officials assert that these modifications are meant to guarantee that SBA funds are not allocated to individuals not authorized to receive federal assistance.

A formal policy notice from the SBA indicates that the agency has amended its loan program regulations so that “100 percent of all direct and/or indirect owners of a small business applicant must be US Citizens or US Nationals who maintain their Principal Residence in the United States, its territories, or possessions.”

The notice also rescinds a previous clause that permitted a borrower to have up to five percent ownership held by foreign nationals or individuals residing outside the United States. Furthermore, it clarifies that lawful permanent residents can no longer hold any ownership stake in a business applying for SBA-backed financing.

The SBA stated that these new rules are part of a broader reform strategy aimed at ensuring that the agency’s programs primarily benefit American small business owners. Among the previously announced measures are enhanced citizenship verification checks across loan programs.

The agency has also disclosed plans to relocate certain field offices from areas identified as sanctuary cities that do not cooperate with US Immigration and Customs Enforcement (ICE).

The Small Business Administration serves as the federal agency dedicated to supporting small businesses through loan guarantees, counseling, and contracting assistance. Its flagship 7(a) and 504 programs facilitate business financing through private lenders.