The U.S. Small Business Administration (SBA) has unveiled a new policy preventing foreign nationals from accessing its loan programs, expanding existing rules to prioritize American citizens and domestically owned businesses.
“The Trump SBA is committed to driving economic growth and job creation for American citizens,” stated SBA Administrator Kelly Loeffler during the announcement on Friday. The policy will take effect 30 days after its release.
The rule applies to all SBA-guaranteed loans, including the Surety Bond program that helps small contractors secure government contract bonding and the Microloan program providing up to $50,000 through third-party intermediaries for startups and small businesses. It also extends prior restrictions on the 504 and 7(a) loan programs, which had already barred businesses partially or wholly owned by foreign nationals from SBA financing.
SBA officials noted that the changes follow persistent demand for small-business capital despite limited lending authority. Loeffler emphasized that “the limited resource of SBA financing must prioritize American citizens who are building businesses and creating jobs here at home.”
The policy adjustment occurs amid heightened federal scrutiny over fraud in federally funded programs, with recent investigations targeting states like Minnesota, where roughly 7,000 borrowers were suspended following suspected misuse of pandemic assistance funds. U.S. Secretary of Housing and Urban Development has also raised concerns about large-scale fraud allegations in California.
