SBA has issued Procedural Notice 5000-872050, Update to SOP 50 10 8 – Citizenship and Residency Requirements (dated December 19, 2025). The changes are effective for 7(a) and 504 applications approved by SBA (receiving an SBA loan number) on and after January 1, 2026.

Specifically, the notice amends SOP 50 10 8 to extend 7(a) and 504 loan eligibility to businesses that have no more than 5% direct and indirect ownership (in the aggregate) held by:

  • Foreign nationals
  • U.S. Citizens, U.S. Nationals, or Lawful Permanent Residents (LPRs) whose Principal Residence is outside of the United States, its territories, or possessions
  • Aliens with Conditional LPR status

Under current requirements, any such ownership is prohibited. These changes are accomplished by a renaming of, and revisions to, SOP 50 10 8, Section A, Chapter 1, Primary Applicant Eligibility Requirements, Paragraph F. (pp. 27-28).

The notice also amends SOP 50 10 8, Appendix 3, Definitions, to:

  • Replace the definition for the term Ineligible Person (p. 406)
  • Add a new definition for the term Principal Residence

Finally, the notice provides guidance regarding lenders’ collection of information relating to the revised citizenship and residency requirements and the required applicant certifications.

To guide lenders through loan eligibility determinations under the revised requirements, SBA also has provided a decision tree.

Please see the notice and the decision tree for complete information regarding these important changes.