What's New? SBA Revised Citizenship and Residency Loan Requirements

Effective March 1, 2026, the Small Business Administration (SBA) implemented significant updates to the citizenship and residency requirements for its 7(a) and 504 loan programs. Under this new policy, 100% of a small business applicant's direct and indirect owners must be U.S. Citizens or U.S. Nationals. Furthermore, all owners are now required to maintain their principal residence within the United States, its territories, or possessions. These changes officially rescind previous exceptions for minority foreign ownership and clarify that Legal Permanent Residents (LPRs) are no longer eligible to hold any ownership interest in a borrowing entity. Business owners and lenders with questions regarding these stricter eligibility standards should contact their local SBA Field Office for guidance.

For details see the policy notice and our section in the Gold Book.