SBA financing is now limited to businesses with 100% Beneficial Ownership by U.S. citizens, U.S. nationals (American Samoa), or Lawful Permanent Residents (LPRs) (commonly referred to as “green card holders”). Previously, businesses could qualify for SBA financing with up to 49% foreign ownership, as long as a U.S. citizen or LPR held the controlling 51%. That is no longer allowed effective March 7, 2025.

This is a big blow to international searchers who were relying on 51% U.S. ownership and searchers raising capital from outside investors.

Key Changes Under the New Policy

No foreign ownership allowed – Businesses with any ownership stake held by visa holders, DACA recipients, asylees, refugees, or undocumented individuals are no longer eligible for SBA financing.

81% of beneficial ownership must be verified in SBA’s E-Tran system before loan approval.

Lenders must certify that no beneficial owner is an ineligible person (foreign national, nonimmigrant visa holder, etc.).

LPRs must provide their alien registration number as part of the application process.

Loan proceeds must be used exclusively for U.S.-based operations – No funds can be used for international activities or businesses with significant foreign ties.

Implications for Searchers and Business Buyers

Fundraising limitations – Any deal relying on foreign investors is now disqualified from SBA financing. Even minority foreign ownership makes a business ineligible.

Increased compliance burden – Lenders must now conduct extensive verification of ownership and immigration status, adding potential delays to the approval process.

Structuring acquisitions becomes more complex – If you were planning to raise capital from foreign investors, you must now restructure your deal or find alternative funding sources.

Existing LOIs and financing plans may need revision – If your acquisition plan assumed foreign capital, review your cap table immediately to avoid surprises.

Steps to Take Now

✔ Review your ownership structure – Ensure every investor and owner meets SBA’s new citizenship and residency requirements.

✔ Consult an SBA loan broker or experienced SBA lender – These changes introduce new compliance hurdles that could disrupt financing timelines.

✔ Reassess your fundraising strategy – If foreign investors were part of your plan, consider conventional loans, private equity, or other non-SBA funding sources.

✔ Understand the new verification requirements – SBA lenders must confirm and document ownership status before loan approval, which could extend processing times.

If your acquisition strategy relied on SBA loans with foreign investors or partial foreign ownership, you will need to restructure or explore alternative funding options immediately.


As always, I am available to you if need help finding SBA financing for your deal. We work with all the major SBA lenders and for the right deal can offer excellent rates like prime + 0% or 7.99% fixed at prime for 10 years. The bank pay us after your loan closes, so this is a 100% free service for you. On average, we save searchers 0.5% on their interest rate and close deals 30% faster. When lenders compete, you win! You can reach me here or directly at --@----.com You can also click here to schedule a meeting with me: https://cal.com/ishan-jetley-3d73m8/30min. Look forward to chatting!