SBA Eligibility Rules Expected to Increase Nonbank Lending

New Small Business Administration rules took effect on March 1, allowing only businesses that are 100% owned by U.S. citizens to access loans, building upon current restrictions to no longer allow lending to Green Card holders. A likely outcome of the new rules will be a jump in alternative small-business lenders as borrowers increasingly seek capital from nonbanks. The SBA’s loan programs provided more than $45 billion to eligible borrowers in FY2025, with lending in the 7(a) loan program declining by 18% in the first five months of FY2026, partly due to the new restrictions.

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