The SBA revised citizenship requirements became effective on March 1, 2026. (Click here to access the SBA Procedural Notice). While the citizenship status of direct and indirect owners affects the Applicant’s eligibility, it is equally important for lenders to understand how the current citizenship requirements apply to guarantors. The SBA distinguishes among three types of guarantors for citizenship purposes:
SBA-Required Guarantor is an individual or entity whose full unlimited guaranty is required because they directly or indirectly own 20% or more of the applicant business.
- Must be a U.S. citizen or U.S. national; AND
- Must have their principal residence in the U.S., its territories, or possessions
Non-Owner Spousal Guarantor is a non-owner who is required to provide a limited guaranty in order to secure a lien on jointly held personal real estate.
- May be an Ineligible Persons; BUT
- Must be legally in the U.S.
Supplemental Guarantor is a person or entity that a lender requires to provide a guaranty out of an abundance of caution and that is not otherwise required by SBA Loan Program Requirements to provide a guaranty.
- May be an Ineligible Persons, BUT
- Must be legally in the U.S.
Additionally, Lenders must keep in mind that an Applicant is ineligible if, beginning six (6) months prior to the date on which an SBA loan number was issued, any direct or indirect owner of the business was an Ineligible Person. However, the Applicant is eligible if the Ineligible Person completely divests their ownership interest prior to the date of issuance of the SBA loan number. This rule applies only to direct or indirect owners; it does not restrict the roles of officers, directors, or employees except that they all must be legally in the U.S. The six-month lookback rule is therefore an ownership‑based eligibility test rather than a broad personnel restriction.