The Small Business Administration moved Monday to block all foreign nationals and non-citizens from obtaining any form of government-backed small business financing.
The sweeping action covers the agency’s surety bond and microloan programs, completing a two-phase process the Trump administration launched earlier this year.
The first phase took effect March 1, when the SBA barred any U.S. small business with partial or full foreign national ownership from participating in the agency’s 504 and 7(a) loan programs.
Monday’s announcement builds directly on that earlier action, closing off the remaining loan channels that had still been accessible to non-citizen business owners.
Under the new rules, applicants seeking any SBA-backed loan must hold American citizenship or U.S. national status and maintain their principal place of residence inside the United States.
SBA Administrator Kelly Loeffler stated, “The Trump SBA is committed to driving economic growth and job creation for American citizens.”
Loeffler added, “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 further explained, “With our lending authority capped annually by Congress and amid record demand for capital, our responsibility is clear: The limited resource of SBA financing must prioritize American citizens who are building businesses and creating jobs here at home.”
The SBA’s Surety Bond program assists new or inexperienced contractors in bidding for government jobs that require bonding, reported Fox News.
The outlet added that the Microloan program offers small businesses loans of up to $50,000 through approved third-party intermediaries.
The microloan program also extends to certain nonprofit childcare centers seeking to expand.
In Fiscal Year 2025, the SBA approved 3,358 loans for small businesses owned in part by a lawful permanent resident, largely during the Biden Administration, representing 4% of the agency’s total 85,000 loan approvals.
The new policy takes effect 30 days after its official publication date.
In 2025, the SBA began requiring citizenship verification across its loan programs and announced plans to relocate its offices out of so-called sanctuary cities — areas where local governments have directed law enforcement not to cooperate with federal immigration enforcement.
Loeffler stated in a July 2025 post on X that her agency “will ensure that every taxpayer-funded program at the SBA goes to benefit ELIGIBLE small business owners – not illegal aliens or criminals.”
Loeffler previously said the agency discovered, following a review of Paycheck Protection Program and Economic Injury Disaster Loan approvals in Minnesota, nearly $400 million in potentially fraudulent loans.
The SBA reviewed thousands of pandemic-era loans approved in Minnesota and identified 7,900 PPP and EIDL loans connected to suspended borrowers, ultimately suspending 6,900 Minnesota borrowers after uncovering the suspected fraud.
In February, the agency suspended 111,620 California borrowers connected to $8.6 billion in suspected pandemic fraud.
The SBA directed media inquiries to its official press release rather than offering additional comment on the policy change.
