President Donald Trump’s Small Business Administration (SBA) is stopping the issuance of small business loans to foreign nationals, requiring that a business be 100 percent owned by a U.S. citizen or U.S. national to receive such a loan.
This week, the SBA published a memo requiring that, beginning next month, applicants for the agency’s primary small business loan be American citizens or American nationals.
“… effective March 1, 2026, SBA hereby revises Standard Operating Procedure 50 10 8 Lender and Development Company Loan Programs guidance related to businesses owned by non-U.S. citizens,” the memo states:
Consistent with 13 C.F.R. 120.100 and Executive Order 14159 “Protecting the American People Against Invasion,” SBA is requiring that 100% of all direct and/or indirect owners of a small business applicant be U.S. Citizens or U.S. Nationals who have their Principal Residence in the United States, its territories, or possessions.
[Emphasis added]Effective March 1, 2026, this Notice rescinds SBA Procedural Notice 5000-872050, removing the narrow exception that allowed a Borrower to have up to 5% ownership held by foreign nationals, or U.S. Citizens, U.S. Nationals, or Legal Permanent Residents (LPRs) whose Principal Residents [sic] was outside of the United States, its territories, or possessions. Further, and beginning with the Effective Date of this Notice, Legal Permanent Residents (LPRs) will not be eligible to own any percentage interest in an Applicant/Borrower, OC, or EPC. [Emphasis added]
Closing the small business loan loophole comes after the SBA suspended almost 7,000 pandemic-era loans for borrowers in Minnesota due to “suspected fraud activity,” according to Administrator Kelly Loeffler.
“In total, these borrowers were approved for 7,900 PPP and EIDL loans worth approximately $400M,” Loeffler announced last month. “These individuals will be banned from all SBA loan programs, including disaster loans, going forward. We will also refer every case, where appropriate, to federal law enforcement for prosecution and repayment. After years, the American people will finally begin to see the criminals who stole from law-abiding taxpayers held accountable — and this is just the first state.”
Likewise, last week, the SBA suspended more than 1,000 businesses from the agency’s 8(a) Business Development Program after business owners failed to submit required financial documents.
John Binder is a reporter for Breitbart News. Email him at [email protected]. Follow him on Twitter here.
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