The U.S. Small Business Administration said it is expanding a policy barring foreign nationals from federally backed small-business loans.
The new guidance, issued March 9 by the U.S. Small Business Administration, prohibits foreign nationals and non-citizens from accessing all SBA-guaranteed loan programs, according to the agency press release.
Officials said the change expands a recent policy that already made businesses wholly or partially owned by foreign nationals ineligible for the agency’s flagship 504 and 7(a) lending programs. The latest notice applies to additional programs, including the Surety Bond Guarantee and Microloan initiatives.
“The Trump SBA is committed to driving economic growth and job creation for American citizens,” said SBA Administrator Kelly Loeffler in a statement announcing the change.
“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 added.
An SBA press release said applicants for any of its loan programs must now be U.S. citizens or U.S. nationals whose principal residence is in the United States. The policy is scheduled to take effect 30 days after publication.
According to the agency, 3,358 loans were approved in fiscal year 2025 for small businesses owned in part by lawful permanent residents, accounting for roughly 4% of the agency’s approximately 85,000 loan approvals.
The press release framed the policy as a response to limited lending capacity and rising demand for financing. Congress caps the agency’s lending authority each year, limiting the total volume of federally guaranteed loans.
“With our lending authority capped annually by Congress and amid record demand for access to capital … the limited resource of SBA financing must prioritize American citizens who are building businesses and creating jobs here at home,” Loeffler said.
The SBA said the decision also builds on earlier actions, including citizenship verification requirements for loan applicants introduced in 2025 and plans to relocate field offices out of jurisdictions the agency has described as sanctuary cities.
However, some lawmakers have reacted negatively. “The Trump administration is stoking the flames of hatred, spreading fear and confusion among immigrants and small business owners. Rather than support hard-working legal immigrants to start or expand a business, the Trump SBA is choosing hatred by barring green card holders from receiving an SBA loan,” Sen. Ed Markey (D-Mass.) and Rep. Nydia Velázquez (D-N.Y.) said in a joint statement. “The Administration’s message to immigrants is clear: you are not welcome to pursue the American Dream.”
The Surety Bond Guarantee program helps contractors obtain bonding required to bid on certain government construction projects, while the Microloan program provides loans of up to $50,000 through nonprofit intermediaries to small businesses and startups.
The policy change comes amid broader scrutiny of federal lending programs and eligibility rules tied to immigration status.
Earlier reporting by The Dallas Express found that the federal government does not always track borrowers’ citizenship status in other federally supported lending programs.
A Freedom of Information Act response from the U.S. Department of Housing and Urban Development previously told DX that the agency’s Federal Housing Administration “does not collect citizenship or residency data from the loan application and therefore does not maintain information on the number of non-permanent residents who have received FHA-insured loans under past policies.”
That disclosure came after a records request seeking data on non-permanent residents, including H-1B visa holders, who may have obtained FHA-insured mortgages.
The housing agency said its data collection has historically focused on “core qualification & underwriting data” and fair-lending metrics such as race and ethnicity, rather than citizenship status.
The SBA’s new rule marks one of the most explicit federal restrictions tying access to government-backed business financing to citizenship status, though the agency’s messaging said the policy reflects the limited lending authority available to the program.
