The Small Business Administration (SBA) under President Donald Trump is implementing new rules regarding small business loans. These changes focus on ownership requirements for loan applicants.
• Starting March 1, 2026, the SBA will only issue small business loans to businesses that are fully owned (100%) by U. S. citizens or U. S. nationals.
• This decision rescinds a previous rule that allowed up to 5% ownership by foreign nationals or certain legal residents.
• The SBA's new policy stems from a crackdown on fraud, particularly after suspending nearly 7,000 loans in Minnesota amid suspected fraudulent activity, with total loan amounts reaching around $400 million.
• Future applicants who do not meet the new ownership criteria will be ineligible for SBA loan programs, including disaster loans.
• The SBA will refer potential fraud cases to federal law enforcement for prosecution and repayment.
The SBA's updated policy aims to tighten oversight of small business loans, reinforcing that ownership must be exclusively by U. S. citizens or nationals. This change represents a significant shift in federal loan eligibility criteria, reflecting current administrative priorities.
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