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Original Date Announced
December 19, 2025The U.S. Small Business Administration (SBA) announced revisions to the Standard Operating Procedure for the Lender and Development Company Loan Programs with Technical Updates, which contains SBA’s loan origination policies and procedures governing the 7(a) and 504 loan programs. The revisions allow a borrower to have up to 5% ownership by foreign nationals, U.S. citizens, U.S. nationals, or legal permanent residents whose principal residence is outside of the United States, and noncitizens with conditional LPR status. The revisions also expand the definition of “Ineligible Person” to include foreign entities and individuals with principal residence in or citizenship in China and Hong Kong.
Trump 2.0 [ID #2121]
2025.12.19 SBA Policy Notice 5000-872050 - Update to Citizenship and Residency RequirementsEffective Date
January 1, 2026Subsequent Trump and Court Action
February 2, 20262026.02.02 SBA Policy Notice 5000-876441 - Update to Citizenship and Residency Requirements and Recission of PN 50000-872050
The SBA announced that, as of March 1, 2026, it is requiring that "100% of all direct and/or indirect owners of a small business [loan] applicant be U.S. Citizens or U.S. Nationals who have their Principal Residence in the United States, its territories, or possessions." Additionally, legal permanent residents will not be eligible to own any percentage interest in an Applicant/Borrower, Operating Company, or Eligible Passive Company.
The notice rescinds SBA Procedural Notice 500-872050, the original policy action abvove, 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 whose principal residents were outside the United States.
View DocumentCurrent Status
NoneOriginal Trump Policy Status
Status: Final/ActualTrump Administration Action: Agency DirectiveSubject Matter: CitizenshipAgencies Affected: OtherAssociated or Derivative Policies
- January 20, 2025 EO 14159: "Protecting the American People Against Invasion"
Pre Trump-Era Policies
Documents
Trump-Era Policy Documents
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