The Small Business Administration (SBA) moved on Monday, March 9, 2026, to implement a comprehensive block on foreign nationals and non-citizens from obtaining any form of government-backed small business financing. This sweeping action encompasses the agency’s surety bond and microloan programs, finalizing a two-phase process that the President Trump administration began earlier this year.
"Our mission is clear: we will ensure that every taxpayer-funded program at the SBA goes to benefit ELIGIBLE small business owners – not illegal aliens or criminals." — SBA Administrator Kelly Loeffler
The initial phase of this policy shift took effect on March 1, when the SBA restricted 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 directly builds upon that earlier measure, effectively closing all remaining loan channels that had previously been available to non-citizen business owners. Under the newly enacted rules, applicants seeking any SBA-backed loan are now required to hold American citizenship or U.S. national status and maintain their principal place of residence within the United States.
SBA Administrator Kelly Loeffler articulated the rationale behind the policy, stating, “The Trump SBA is committed to driving economic growth and job creation for American citizens.” Loeffler further elaborated on the expansion of the policy: “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 emphasized the agency's prioritization, explaining, “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 is designed to assist new or inexperienced contractors in bidding for government jobs that necessitate bonding. The Microloan program, another key offering, provides small businesses with loans of up to $50,000 through approved third-party intermediaries. This microloan initiative also extends its support to certain nonprofit childcare centers seeking to expand their operations.
In Fiscal Year 2025, the SBA approved 3,358 loans for small businesses that were owned in part by a lawful permanent resident. These approvals, largely occurring during the Biden Administration according to the source, constituted 4% of the agency’s total 85,000 loan approvals for that fiscal year. The new policy is set to become effective 30 days following its official publication date.
This policy change follows earlier actions taken by the SBA. In 2025, the agency began requiring citizenship verification across its various loan programs. Concurrently, the SBA announced its intentions to relocate its offices from so-called sanctuary cities, which are jurisdictions where local governments have policies limiting cooperation with federal immigration enforcement. Administrator Loeffler had previously 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.”
The administration has also highlighted efforts to combat fraud in federal lending programs. Loeffler reported that a review of Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) approvals in Minnesota uncovered nearly $400 million in potentially fraudulent loans. Following this review, the SBA identified 7,900 PPP and EIDL loans linked to suspended borrowers and ultimately suspended 6,900 Minnesota borrowers due to suspected fraud. Earlier in February, the agency suspended 111,620 California borrowers in connection with $8.6 billion in suspected pandemic-era fraud.
The SBA directed media inquiries to its official press release for further details on the policy change, rather than offering additional direct commentary. The agency also posted on X, announcing, "Today, the SBA announced a new policy that will ban foreign nationals and all noncitizens from accessing SBA-backed small business loans."
