The U.S. Small Business Administration (SBA) has announced a new policy that will bar foreign citizens and non-citizens from accessing SBA-guaranteed small business loans. The change was issued Monday by SBA Administrator Kelly Loeffler and will apply to all SBA loan programs, including prime loan programs and small assistance programs.Under the new policy, only US citizens and US citizens who reside in the United States, its territories, or possessions will be eligible to apply for SBA-backed loans. This includes major loan programs such as 7(a), 504, microloan, and surety bond programs. Any business that is owned by a foreign national, including lawful permanent residents (green card holders), will be ineligible for these federal loans.The SBA says the policy is designed to prioritize American citizens and job creators. Administrator Loeffler said that the agency’s lending authority is limited each year by Congress, and because the demand for small business capital is high, the limited funds should go to American citizens first.The policy change builds on earlier rules that already tightened eligibility.In February 2026, the SBA updated its guidance to require that 100% of the direct and indirect owners of small businesses applying for loans must be U.S. citizens or nationals, removing the earlier allowance for businesses that had nominal foreign ownership.According to SBA data, about 3,300 loans approved in fiscal year 2025 were partly to lawful permanent residents and businesses owned by foreign nationals. These accounted for approximately 4 percent of total SBA loan approvals that year.The effective date of the policy is set for 30 days after publication, meaning affected applicants must meet the revised citizenship requirements by that time.The change was criticized by some lawmakers, saying it would harm immigrant entrepreneurs who contribute to the American economy. Opponents argue that excluding lawful permanent residents and other non-citizens from federal small business loans could reduce opportunities for business creation and job growth in communities across the country.