In connection with each application for an SBA-guaranteed loan, a lender must obtain a completed and executed U.S. Small Business Administration ("SBA") Statement of Personal History (SBA Form 912) from each proprietor, general partner, officer, director, LLC managing member, 20% owner, Trustor and manager of day-to-day operationsof the applicant.  A U.S. born or naturalized citizen will indicate his or her citizenship by checking "yes" to the question of whether such person is a U.S. citizen.  At times, however, a lender may receive a completed Statement of Personal History that indicates the principal is not a U.S. citizen.  In such cases, the lender must determine whether the business is still eligible for SBA-guaranteed financing.

According to the SBA, financial assistance may be provided to "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" (SOP 50 10 5(D), page 120, Section E). If the principal indicates on the Statement of Personal History that he or she is a lawful permanent resident alien ("LPR"), the lender must obtain proof of this fact. The proof should consist of the U.S. Citizenship and Immigration Services ("USCIS") Form I-551 (commonly known as a "green card"), which will be in the form of either a Resident Alien Card or a Permanent Resident Card.   Lenders should verify the information on such form, including confirming that the applicable Card is not expired, as the form must be renewed every ten (10) years.   So long as the LPR status is verified by the lender, and subject to meeting all other SBA eligibility requirements, the business owned by such LPR will be eligible to receive SBA-guaranteed financing.

If the principal is not an LPR, the lender must verify the principal's status before it can consider making an SBA-guaranteed loan to the applicant business. Using the alien registration number supplied by the principal on the completed Statement of Personal History, the lender must submit to the SBA's Sacramento Loan Processing Center a completed USCIS Form G-845 Document Verification Request, along with a copy of the principal's USCIS documentation, and a signed and dated authorization statement from the principal, using verbiage set forth in SOP 50 10 5(D), authorizing the release of his or her status to the lender. Lenders should note that the Department of Homeland Security has recently revised USCIS Form G-845, and should be sure to use the version of the Form that indicates an expiration date of "01/31/2015" in the upper right corner of the first page. The lender must insert "SBA-guaranteed loan" as the basis for the request in accordance with SOP 50 10 5(D), page 122, Section 5.a.(3).

If the result of the status inquiry indicates that the principal is (i) a documented alien admitted to the U.S. for a specific purpose and for a temporary period of time, (ii) an asylee or refugee (person receiving temporary refuge) with LPR status, or (iii) an alien subject to the Immigration Reform and Control Act of 1986 ("IRCA"), the applicant business might be considered eligible, provided the following additional requirements ("Additional Requirements") can be met:

1. the current management must have been operating the business for at least one year prior to the application date and/or the personal guaranties of the management will be a condition of the loan; and
2. there must be pledged collateral within the United States that is sufficient to pay the loan in full at any time during the term of the loan.

Finally, if (i) a business is owned and managed by foreign nationals, foreign entities, or non-immigrant aliens, (ii) the business is not listed in Appendix 1 of the SOP 50 10 5(D), and (iii) the Additional Requirements can be met, the applicant business might be eligible for SBA-guaranteed financing. Such loan should be submitted to the SBA for general processing.

Of course, a proposed loan must also meet all other SBA eligibility requirements to be eligible for SBA financing.

For more information on the eligibility of Non-U.S. Citizen owned businesses, please contact Janet at (215) 542-7070 or JDery@StarfieldSmith.com.

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