Trump Team Unveils New Rule
The Small Business Administration (SBA) announced a major change Wednesday that will limit federally backed small business loans exclusively to U.S. citizens, a move supporters say will ensure taxpayer-funded programs benefit Americans first.
SBA Administrator Kelly Loeffler revealed the policy during an appearance on Newsmax’s Finnerty, confirming that foreign nationals will no longer be eligible to receive SBA loans guaranteed by the federal government.
According to Loeffler, the new rule is designed to ensure that taxpayer-backed programs prioritize American entrepreneurs.
“We have taken action to prevent foreign nationals from receiving small business loans backed by the federal government,” Loeffler said during the interview. “Hardworking American taxpayers should not be responsible for guaranteeing business loans for individuals who are not U.S. citizens.”
SBA Lending Review Led to Policy Change
The decision follows a review of SBA lending practices after the agency added a citizenship requirement to loan applications last year.
Loeffler said that once the SBA began collecting citizenship data, officials discovered that some government-backed loans had been issued to foreign nationals.
“This administration is the first to ask the question about citizenship in Small Business Administration lending,” she explained. “When we started reviewing the data, we found that SBA loans were indeed going to foreign nationals.”
According to SBA figures, roughly 3.9 percent of SBA loans issued last year — about 3,500 out of approximately 85,000 loans — went to foreign nationals.
Under the new policy, those loans will no longer be permitted.
Key SBA Loan Programs Affected
The new rule will apply to several major lending programs operated by the Small Business Administration.
This includes the agency’s flagship 7(a) loan program, as well as microloans and surety bond guarantees, all of which are designed to help entrepreneurs secure financing when traditional bank loans may not be available.
Loeffler emphasized that the programs will now focus exclusively on helping American citizens start and grow businesses.
“These programs are intended to support American small businesses,” she said. “The 7(a) loan program, microloans, and surety bonds will now be reserved for American citizens.”
Example Cited From Previous Loan Approval
During the interview, Loeffler pointed to a case uncovered after the Trump administration took office in which an illegal immigrant had reportedly been approved for a taxpayer-backed loan during the previous administration.
“We identified a situation where an illegal alien had been approved for a $750,000 SBA loan that was close to closing,” Loeffler said. “Fortunately, we were able to step in and stop that loan before it went through.”
She said the situation highlighted the need for stronger safeguards within the SBA lending system.
Critics Raise Concerns About Policy
Some progressive policy groups have criticized the change, arguing that it could negatively impact immigrant entrepreneurs and certain small business communities.
However, Loeffler dismissed those concerns and said the SBA’s mission is to support American taxpayers and citizens.
“This policy is about putting Americans first and making sure government-backed programs serve the people who fund them,” she said.
Focus on Supporting American Small Businesses
Supporters of the change argue that SBA loans are a vital tool for economic growth and should primarily benefit U.S. citizens who are building businesses and creating jobs.
The Small Business Administration has long played a key role in helping small companies access financing, especially during challenging economic periods.
With the new rule in place, SBA officials say federally guaranteed small business loans will now be directed exclusively toward American citizens, ensuring that taxpayer-backed lending programs prioritize U.S. entrepreneurs.
