For SBA lenders
Short answer
Yes, a foreign corporation can own a minority stake (less than 20%) in an SBA 7(a) loan applicant business without impacting eligibility, provided all 20%+ owners meet citizenship/residency requirements.
SBA rules primarily focus on the citizenship or lawful permanent resident status of individuals owning 20% or more of the applicant business. For owners below 20%, their citizenship or residency status is generally not a barrier, and foreign corporate ownership is permissible for minority stakes.
A U.S. small business seeking a 7(a) loan has 85% ownership by U.S. citizens and a 15% stake owned by a Canadian holding company. This structure is acceptable, as all 20%+ owners are U.S. citizens.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Policy Notice 5000-876441 - Citizenship and Residency Requirements
Procedural Notice 5000-876626 - Revised Applicant Ownership, Citizenship and Residency
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on citizenship/residency
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day