SBA Implements New Policy on Foreign Nationals and Business Loans

The Small Business Administration (SBA) recently announced a policy that has caught many off guard—it seems surprising that such a measure was even deemed necessary. There are already discussions about potential further actions.

On Monday, led by Administrator Kelly Loeffler, the SBA conveyed that it will now prohibit foreign nationals and non-citizens from accessing loans that are backed by the SBA.

According to Loeffler, “The Trump SBA is focused on fostering economic growth and job creation for Americans.”

This update builds upon a previous policy change made on March 1, which directed that small businesses owned or co-owned by foreigners would be ineligible for two key SBA loan programs.

“Last month, we made it clear that the SBA will not allow foreign nationals to access our core small business lending programs, and today we are extending that policy to all SBA-guaranteed loans. Our lending authority is limited by Congress every year, and with record demand for access to capital, our responsibility is clear. The SBA’s limited financial resources must prioritize Americans who are starting businesses and creating jobs right here at home,” she stated.

These adjustments are part of a recent revision concerning the Security deposit and microloan program.

Citing SBA data, the agency reported that under the Biden administration, approximately 3,300 loans—about 4% of the current total of 85,000—were made primarily to businesses partly owned by legal permanent residents.

These changes have shed light on a system that some might argue is more flawed than previously thought. Some users on X remarked on their astonishment, stating, “It is surprising why this has not already been adopted as policy.”

Yet, there are still suggestions that the system could use additional improvements. One user commented that, “All loans issued to foreigners should be required to be repaid in full immediately.”