SBA for Non Residents

May 28, 2023

by a searcher in Chicago, IL, USA

Hi SearchFunders,

My partner and I are interested in acquiring a business but he is from England and not a US citizen. I am wondering what rules the SBA has for acquiring businesses with Non Citizens. Is it possible to do? I'd love to hear other people's experiences.

Thank you :)

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

The rules on this can be very confusing so I will try my best to simplify it. In order to use an SBA 7A loan to buy a business in the United States you must be a US Citizen or a permanent US resident. If you are not a US Citizen, then you can participate in an SBA 7A loan so long as 51% or more of the company is owned by US Citizens. So if you and a partner are looking to buy a business and your partner is not a US Citizen but you are, then you would need to own 51% or more of the business to qualify for SBA financing.

Although you can do a deal with 49% of the business owned by a non-US citizen, please keep in mind lenders are going to underwrite the risk associated with one of the owners not being a US Citizen. If that person has all of the expertise as an example, they might deem it a higher risk transaction. However, with that said we have done numerous deals where a portion up to 49% of the company is owned by non-US citizens and have found lenders willing to do those deals. I hope this helps to clarify. If you have any additional questions you can reach me here or directly at redacted

Reply by a searcher
from INSEAD in Vancouver, BC, Canada

Hi, my partner and I are Canadian and we spent some time looking at the options. At the end of the day, you really need to be a US citizen or permanent resident. If you had someone who is a US resident that could partner with you in the transaction (and would be willing to take the personal guarantee associated with the SBA loan), then you could acquire 49% and the other person has 51%. Unfortunately, it isn't simple for non-residents at least from what we learned. I am interested to hear what other people have learned or done... maybe there is a way to do it.

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