SBA Policy Notice: Citizenship and Residency Requirements and Recission of Procedural Notice

February 4, 2026 / Source: Small Business Administration

The purpose of this notice is to advise SBA employees, 7(a) Lenders, and Certified Development
Companies (“CDCs”) that effective March 1, 2026, SBA hereby revises Standard Operating
Procedure (“SOP”) 50 10 8 Lender and Development Company Loan Programs guidance related
to businesses owned by non-U.S. citizens. Consistent with 13 C.F.R. 120.100 and Executive
Order 14159 “Protecting the American People Against Invasion,” SBA is requiring that 100% of
all direct and/or indirect owners of a small business applicant be U.S. Citizens or U.S. Nationals
who have their Principal Residence in the United States, its territories, or possessions.

Effective March 1, 2026, this Notice rescinds SBA Procedural Notice 5000-872050, 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 (LPRs) whose
Principal Residents was outside of the United States, its territories, or possessions. Further, and
beginning with the Effective Date of this Notice, Legal Permanent Residents (LPRs) will not be
eligible to own any percentage interest in an Applicant/Borrower, OC, or EPC.
Questions
Questions concerning this Notice may be directed to the Lender Relations Specialist in the
local SBA Field Office.