SBA Procedural Notice: Revised Applicant Ownership, Citizenship, and Residency Requirements for 7(a) and 504 Loans

February 16, 2026 / Source: U.S. Small Business Administration

The purpose of this notice is to announce that SBA is incorporating into Standard Operating
Procedure (“SOP”) 50 10 8, Lender and Development Company Loan Programs, recent policy
changes issued in SBA Policy Notice 5000-876441, Update to SOP 50 10 8 – Citizenship and
Residency Requirements and Recission of Procedural Notice 5000-872050, the updated policy
requirements 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.
These changes will apply to all 7(a) and 504 loans approved (i.e., issuance of the SBA loan
number) under delegated procedures on or after March 1, 2026.
These changes will apply to all non-delegated 7(a) and 504 applications that enter R1 status (as
indicated in E-Tran) on or after March 1, 2026. Applications with any Lawful Permanent
Resident (LPR) ownership that receive R1 status in E-Tran on or before 11:59 PM Eastern,
February 28, 2026, will be processed by SBA. Beginning March 1, 2026, only Applications
from businesses with 100% ownership by U.S. Citizens or U.S. Nationals are eligible.

Reference the link to see the SOP 50 10 8 Revisions.