By Andrew Miller
We know that small business owners don’t have enough hours in the day as it is. Your time and attention are valuable. The Signet Letter cuts through the noise to put the right information in front of you, in one easy place. That way, you can stay focused on running your business.
To kick things off, we’re covering a recent ruling that’s affecting many business owners throughout South Florida, New York, Texas, and other markets with large international communities.
As part of a focused effort on growing American businesses and creating new jobs for citizens, the Small Business Administration (SBA) is no longer allowing foreign-owned businesses to receive government-guaranteed loans.
The only businesses now eligible for loans under the 7(a) and 504 programs are those owned solely by American citizens or those with a primary residence in the US or its territories. In addition, those who don’t meet these requirements (including previously eligible green card holders) will be barred from applying for the Surety Bond or Microloan programs.
Access to federal loan programs began shrinking last year, when the SBA issued a new policy reserving them for businesses with no more than 5% foreign ownership.
These new restrictions represent a significant change from previous administrations. Historically, small businesses could qualify for government-guaranteed loans as long as US citizens owned a controlling share of at least 51%.
Aside from disqualifying many business owners from receiving SBA-guaranteed loans altogether, the new policy is likely to make the process slower and more complicated.
Lenders are now required to verify a business owner’s citizenship status to ensure eligibility for SBA-guaranteed loans. This additional step is expected to increase documentation requirements and extend underwriting timelines.
Signet Capital Group works with small and medium-sized businesses to find the right path forward, helping most clients secure funding in as little as two hours. Contact us now to explore your options.
With financing timelines growing longer and eligibility narrowing, access to fast, flexible alternatives is becoming more valuable than ever.