SBA rules · SOP 50 10 8.1

Can an SBA loan finance a business in a foreign country?

No, businesses physically located in a foreign country are ineligible for SBA financing, and while eligible U.S. businesses with international operations may qualify, loan proceeds must benefit the U.S.-based entity exclusively, subject to strict limits on overseas activities.

Quoted from SBA SOP 50 10 8.1Every quote checked word for word

In detail

Foreign business ineligibility: Businesses located in a foreign country are strictly ineligible for SBA assistance, and 504 projects in foreign countries are expressly prohibited.
U.S. location requirements: All applicants must be created, organized, or incorporated in the United States, its territories, or possessions, and must be located and primarily operate within the United States.
International operations of U.S. businesses: If an applicant operates internationally, loan proceeds must be used exclusively for the benefit of the U.S.-based borrower so that the business and its employees remain subject to U.S. and local taxes.
Export Express restrictions: Export Express loan proceeds may not be used to finance operations outside the United States, except for the marketing and/or distribution of products or services exported from the U.S..
Export Working Capital Program limits: Under the Export Working Capital Program (EWCP), loan proceeds cannot be used to acquire, equip, or rent commercial space overseas, nor may they finance foreign travel or overseas support staff unless directly related to the specific transaction being financed.

The source

What the SOP says

“Businesses located in a foreign country are not eligible.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > Life insurance carriers are not eligible. 13 CFR § 120.110(d) (lines 435-444)✓ Verified

“Projects in foreign countries.

SOP 50 10 8.1, Chapter 1: Eligibility through Submission of Application > Ineligible 504 Projects (lines 3368-3371)✓ Verified

“The Applicant must be created, organized, or incorporated in the United States, its territories, or possessions, be located and primarily operate in the United States (including its territories and possessions), be authorized to conduct business in the state, territory, or possession where it seeks SBA financial assistance, pay taxes to the United States (unless exempt, as in certain businesses in Puerto Rico and elsewhere), and to the extent practicable, purchase only American-made equipment and products with the proceeds of the SBA loan.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > Located in the United States (lines 341-345)✓ Verified

“If an Applicant operates internationally, the loan proceeds must be used exclusively for the benefit of the U.S.-based Borrower (as a result, the business and its employees are subject to U.S. and local taxes).

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > Located in the United States (lines 341-345)✓ Verified

“Finance operations outside of the United States, except for the marketing and/or distribution of products/services exported from the United States; or

SOP 50 10 8.1, Chapter 5: 7(a) Export Trade Finance > Debt Refinancing (lines 2374-2382)✓ Verified

“Acquire, equip, or rent commercial space overseas; or

SOP 50 10 8.1, Chapter 5: 7(a) Export Trade Finance > Loan proceeds may not be used to (13 CFR § 120.342): (lines 2579-2586)✓ Verified

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