No Loan for US Companies with non US residents

Effective March 1, 2026, the Trump administration has enacted a, rule restricting U.S. Small Business Administration (SBA) loans to businesses that are 100% owned by U.S. citizens or U.S. nationals. This policy change reverses previous regulations that allowed up to 5% ownership by foreign nationals or legal permanent residents (green card holders).

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Key Aspects of the New SBA Rule (Effective March 1, 2026)

• Citizenship Requirement: All direct and indirect owners, as well as key employees (such as top-level managers), must be U.S. citizens or U.S. nationals.

• Green Card Holders Barred: Legal permanent residents (green card holders) are no longer eligible for SBA-backed loans.

• 6-Month Lookback: A business is ineligible if a foreign national stakeholder had any ownership in the 6 months prior to the application.

• Documentation: Lenders are required to verify the citizenship status and financial information for all loans.

• Scope: This affects the primary 7(a) and 504 loan programs.

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Regarding "No Document" Loans
The new policy actually moves in the opposite direction of "no document" loans, requiring stricter verification of ownership and citizenship.

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• Increased Documentation: Lenders must verify financial information (often via IRS tax transcripts) for all loans.

• Ownership Verification: Documentation must be provided for up to 81% of direct and indirect ownership.

• "Debanking" Order Interaction: While a separate August 2025 Executive Order sought to prevent "politicized" loan denials (debanking), it does not override the new, stricter, legal, and citizenship requirements