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Can Non-US Citizens Qualify for SBA Loans?
If you are a non-U.S. citizen considering an SBA loan, there are some clear requirements you must be aware of.
NOTE: To quality for an SBA loan, at least 51% of the small business MUST be owned by a U.S. citizen or long-term permanent resident.
If you’re not a U.S. citizen, can you still qualify for an SBA loan for your small business?
Sometimes — but you must meet very specific conditions.
Lawful permanent residents, or LPRs, also known as green card holders, can usually qualify for SBA financing.
However, if you are not a legal permanent resident — say, you are in the United States on a temporary visa — things can get far more complex. Read on to find out more.
The SBA Loan Approval Process for Non-U.S. Citizens
The SBA states that their financing is available for “businesses that are 51% owned and controlled by persons who are not citizens of the US provided the persons are lawfully in the United States.”
However, it’s up to the discretion of an individual lender whether they want to provide a loan to a non citizen.
If a lender does want to go forward with the loan application process, they would need to verify the small business owner's green card (referred to as U.S. Citizenship and Immigration Services (USCIS) Form I-551).
SBA Loan Approvals for Non-Green Card Holders and Foreign Nationals
If a potential SBA loan application does not have a green card and are not a lawful permenant resident (LPR), the lender needs to determine the borrower’s status. Potentially eligible statuses include:
“A documented alien admitted to the U.S. for a specific purpose and for a temporary period of time”
An individual granted asylum or a temporary refugee with LPR status
“An alien subject to the Immigration Reform and Control Act of 1986 (IRCA)”
Present management must have operated the business for a minimum of 24 months before the application date, or, they will need to personally gurantee the loan.
The borrower must have enough U.S.-based collateral to repay the loan in full at any time during its term.
Can a non-U.S. citizen apply for an SBA loan?
Yes, a non-U.S. citizen can apply for an SBA loan. As part of the SBA loan application process, each “proprietor, general partner, officer, director, LLC managing member, and 20%+ owner” of a business applying for a loan must provide an SBA Form 912 (Statement of Personal History) to their lender. The SBA states that their financing is available for “businesses that are 51% owned and controlled by persons who are not citizens of the US provided the persons are lawfully in the United States.” However, it’s up to the discretion of an individual lender whether they want to provide a loan to a non-citizen. If a lender does want to go forward with the loan application process, they would need to get a U.S. Citizenship and Immigration Services (USCIS) Form I-551, also known as a green card, from the borrower.
If a potential SBA loan application does not have a green card available because they are not a legal permeant resident (LPR), the lender needs to determine the borrower’s status. Potentially eligible statuses include:
- A documented alien admitted to the U.S. for a specific purpose and for a temporary period of time
- An individual granted asylum or a temporary refugee with LPR status
- An alien subject to the Immigration Reform and Control Act of 1986 (IRCA)
However, to be eligible, a business must also meet other requirements, including:
- Present management must have operated the business for a minimum of 12 months before the application date, or, they will need to persoinally gurantee the loan.
- The borrower must have enough U.S.-based collateral to repay the loan in full at any time during its term.
In some cases, a business owned/managed by citizens of foreign countries, foreign business entities, or non-immigrant aliens can also be eligible for SBA financing, as long as it meets the conditions mentioned above.
What documents are required for a non-U.S. citizen to apply for an SBA loan?
As part of the SBA loan application process, each “proprietor, general partner, officer, director, LLC managing member, and 20%+ owner” of a business applying for a loan must provide an SBA Form 912 (Statement of Personal History) to their lender. Additionally, if the potential SBA loan application does not have a green card available because they are not a legal permanent resident (LPR), the lender needs to determine the borrower’s status. Potentially eligible statuses include:
- A documented alien admitted to the U.S. for a specific purpose and for a temporary period of time
- An individual granted asylum or a temporary refugee with LPR status
- An alien subject to the Immigration Reform and Control Act of 1986 (IRCA)
In some cases, a business owned/managed by citizens of foreign countries, foreign business entities, or non-immigrant aliens can also be eligible for SBA financing, as long as it meets the conditions mentioned above, including:
- Present management must have operated the business for a minimum of 12 months before the application date, or, they will need to personally guarantee the loan.
- The borrower must have enough U.S.-based collateral to repay the loan in full at any time during its term.
What are the eligibility requirements for a non-U.S. citizen to apply for an SBA loan?
The SBA states that their financing is available for “businesses that are 51% owned and controlled by persons who are not citizens of the US provided the persons are lawfully in the United States.” However, it’s up to the discretion of an individual lender whether they want to provide a loan to a non-citizen. If a lender does want to go forward with the loan application process, they would need to get a U.S. Citizenship and Immigration Services (USCIS) Form I-551, also known as a green card, from the borrower.
To be eligible, a business must also meet other requirements, including:
- Present management must have operated the business for a minimum of 12 months before the application date, or, they will need to personally guarantee the loan.
- The borrower must have enough U.S.-based collateral to repay the loan in full at any time during its term.
In some cases, a business owned/managed by citizens of foreign countries, foreign business entities, or non-immigrant aliens can also be eligible for SBA financing, as long as it meets the conditions mentioned above.
What are the advantages of an SBA loan for a non-U.S. citizen?
The advantages of an SBA loan for a non-U.S. citizen include:
- The ability to access capital to start or expand a business in the U.S.
- Competitive interest rates and terms.
- No requirement for a U.S. credit history.
- No requirement for a U.S. cosigner.
- No requirement for a U.S. citizenship.
Source: www.sba7a.loans/sba-7a-loans-small-business-blog/sba-loans-for-non-citizens
Are there any special considerations for a non-U.S. citizen when applying for an SBA loan?
Yes, there are special considerations for a non-U.S. citizen when applying for an SBA loan. As part of the SBA loan application process, each “proprietor, general partner, officer, director, LLC managing member, and 20%+ owner” of a business applying for a loan must provide an SBA Form 912 (Statement of Personal History) to their lender. The SBA states that their financing is available for “businesses that are 51% owned and controlled by persons who are not citizens of the US provided the persons are lawfully in the United States.” However, it’s up to the discretion of an individual lender whether they want to provide a loan to a non-citizen. If a lender does want to go forward with the loan application process, they would need to get a U.S. Citizenship and Immigration Services (USCIS) Form I-551, also known as a green card, from the borrower.
If a potential SBA loan application does not have a green card available because they are not a legal permeant resident (LPR), the lender needs to determine the borrower’s status. Potentially eligible statuses include:
- A documented alien admitted to the U.S. for a specific purpose and for a temporary period of time
- An individual granted asylum or a temporary refugee with LPR status
- An alien subject to the Immigration Reform and Control Act of 1986 (IRCA)
However, to be eligible, a business must also meet other requirements, including:
- Present management must have operated the business for a minimum of 12 months before the application date, or, they will need to persoinally gurantee the loan.
- The borrower must have enough U.S.-based collateral to repay the loan in full at any time during its term.
In some cases, a business owned/managed by citizens of foreign countries, foreign business entities, or non-immigrant aliens can also be eligible for SBA financing, as long as it meets the conditions mentioned above.
However, to be eligible, a business must also meet other requirements, including:
In some rare cases, a business owned or managed by citizens of foreign countries, foreign business entities, or non-immigrant aliens can also be eligible for SBA financing, as long as they meets the conditions mentioned above. However, at present it is extremely rare for lenders to approve these loans.
Case Study: Opening a Second Restaurant
Razvan, a Romanian entrepreneur, co-owned Bucuresti Bistro, a thriving Romanian restaurant, alongside two American partners in Chicago. The restaurant quickly gained popularity among locals and tourists alike for its authentic cuisine and warm, inviting atmosphere. Encouraged by their success, Razvan and his partners decided to expand by opening a second location.
However, as a non-permanent resident, Razvan faced challenges when trying to secure financing for the expansion. He learned that although the SBA financing was generally available to non-U.S. citizens, his eligibility would depend on his immigration status and the discretion of the lender. Because he was not a green card holder, he could not own a majority of the business. As it happened, his American partners fortunately had a controlling interest in the business of 60%.
Determined to secure the funds needed for their new location, Razvan and his partners approached a lender experienced in working with non-citizens applying for SBA loans. The lender reviewed Razvan's immigration status, confirming that he was a documented alien admitted to the U.S. for a specific purpose and for a temporary period of time.
Bucuresti Bistro had been successfully operated by the current management for more than 24 months, fulfilling one of the requirements. Furthermore, the partners were able to offer sufficient U.S.-based collateral to secure the loan. With these factors in their favor, Razvan and his partners successfully obtained an SBA 7(a) loan to finance their expansion.
With the financing secured, Bucuresti Bistro opened a second location, bringing their unique blend of authentic Romanian cuisine and a welcoming atmosphere to a new community. Razvan's persistence and collaboration with a knowledgeable lender allowed him to overcome the challenges faced by non-permanent residents in securing SBA financing, ultimately contributing to the growth and success of their business.
This is a fictional case study provided for illustrative purposes.
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