SBA Eligibility
SBA is announced a significant change to their SBA Policy. Here are the changes.
Effective March 1, 2026, 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 change will remove 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.
If you have a project that requires financing through the SBA, please contact us. We work with lenders who can obtain approvals before the upcoming deadline, ensuring your eligibility for SBA financing. For more complex situations, we are happy to review your case and determine whether it can be structured to meet SBA requirements.
Additionally, for projects currently pursuing SBA 504 loans, it may be advisable to consider transitioning to a 7(a) loan. In some cases, CDC lenders may not be able to meet the approval deadline, which could affect eligibility for SBA financing.
The team at Blue Water Capital Advisors has extensive experience in SBA lending on the banking side. Our team has over 20+ years of commercial banking experience and has significant knowledge of the SBA’s policies. If you have any questions related to this or need any financing, feel free to reach out to us.