Can a U.S. company with foreign operations get an SBA loan?
Short answer
Yes, if it is organized in the United States, primarily operates here and pays U.S. taxes. Proceeds must benefit only the U.S. borrower. A business located in a foreign country is ineligible (SOP 50 10 8.1, Sec. A, Ch. 1, Para. C; 13 CFR § 120.110(e)).
Yes, if the applicant is a U.S. business that primarily operates in the United States. A business located in a foreign country is ineligible under 13 CFR § 120.110(e).
SOP 50 10 8.1, Sec. A, Ch. 1, Para. C sets the test. The applicant must:
- Be created, organized or incorporated in the United States, its territories or possessions.
- Be located and primarily operate there.
- Be authorized to do business in the state, territory or possession where it seeks the loan.
- Pay U.S. taxes, unless exempt, as certain businesses in Puerto Rico and elsewhere are.
- To the extent practicable, buy only American-made equipment and products with the proceeds.
If you operate internationally, proceeds must be used only for the U.S.-based borrower.
Trade limits
A 7(a) or 504 loan cannot go to a business that directly or indirectly exports to a prohibited country. SBA points to Note 7 on the Export-Import Bank's Country Limitation Schedule. The loan also cannot be made if the transaction would be barred under an Office of Foreign Assets Control (OFAC) sanctions program (Para. C.3). Lenders must determine that the business and its owners are not on OFAC lists (Para. J, p. 39).
Foreign ownership is a separate test under Para. F, and foreign affiliates count toward size (13 CFR § 121.301(f)(3)).
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