Overview
- A Feb. 2 policy notice bars any noncitizen ownership in SBA‑backed loan applicants and takes effect March 1.
- The update eliminates a December provision that had allowed up to 5% ownership by foreign nationals or certain lawful noncitizens.
- The rule is stricter than earlier 2025 criteria that still permitted lawful permanent residents to participate in SBA programs.
- An SBA spokesperson said the move ensures taxpayer-backed support goes to U.S. job creators, while Democratic leaders and small-business advocates call it discriminatory and harmful to immigrant entrepreneurship.
- Lenders and community groups report plans for restructurings and rushed closings and warn of pressure on Korean American business districts and banks reliant on SBA lending as 7(a) volumes have slowed this fiscal year.