If you are planning to buy a small business in Florida with an SBA 7(a) loan, two things changed this year that most listing sites have not caught up with. One already removed a large group of buyers entirely. The other lands on 1 October and quietly cuts how much debt the same business can carry.
Neither is a proposal. Both are signed policy.
Since 1 March 2026, the SBA requires that 100% of all direct and indirect owners of a borrowing business be US citizens or US nationals whose principal residence is in the United States.
The notice is explicit that green-card holders are included in the exclusion: Legal Permanent Residents "will not be eligible to own any percentage interest" in the applicant. The forthcoming version of the SBA's operating procedures goes further, naming conditional permanent residents, asylees, refugees, visa holders and DACA recipients as ineligible persons, and adding a six-month lookback on ownership.
This matters more in Florida than almost anywhere else. A significant share of Main Street buyers here are permanent residents or E-2 visa holders, and this route is now closed to them regardless of credit, capital or experience.
A trap worth knowing about. The underlying regulation, 13 CFR 120.110(e), still contains the phrase "businesses in the U.S. owned by aliens may qualify." That text was never amended. The SBA layered the restriction on by policy notice under a different section. So if you read the regulation itself and conclude your partner's green card is fine, you will reach the wrong answer, and you will reach it from a primary source.
If any owner in your deal is not a US citizen or national, that is the first question to resolve. It ends more deals than any financial test.
The SBA's operating procedures are being replaced on 1 October 2026. For anyone buying a business as an outside buyer, the number that matters is the debt service coverage ratio.
| Through 30 September | From 1 October | |
|---|---|---|
| Coverage ratio required | 1.15x | 1.25x |
| Sub-$350k loans | lower 1.10x standard available | barred from acquisitions |
| Independent valuation | only above $250k financed | required on every deal |
| Quality of Earnings report | not required | required at $3M+ purchase price |
| Projections to meet coverage | permitted in some cases | not permitted |
The coverage change is the one with teeth. Going from 1.15x to 1.25x is roughly a 9% reduction in the debt the same earnings can support. A business that just barely worked in September does not work in October, and nothing about the business will have changed.
Two smaller changes compound it. Projections can no longer be relied on to meet the coverage test, so historical numbers have to carry the deal on their own. And the streamlined small-loan process can no longer be used for a change of ownership at all, which means sub-$350k acquisitions get slower and are underwritten to the full standard rather than becoming impossible.
Timing is the practical point. Diligence on a small acquisition rarely takes less than six weeks. If you are starting now, you are closing under the new rules, not the current ones. Underwrite to 1.25x.
We ran the current rules across every active business listing in our Florida inventory. Two findings surprised us.
Eligibility is almost never the problem. Only about 2% of listings are ineligible because of what the business does. The categories that do fail are narrow and specific: cannabis in any form regardless of state licensing, salon suite rental businesses (though ordinary salons are entirely fine), passive real estate, and businesses whose gambling revenue crosses a third of the total.
Cash flow is the problem. Roughly half of the listings that publish both a price and an earnings figure cannot service the debt at their asking price with 10% down. That is before the October change, which pushes the number higher.
There is a related point about your own capital. Going from $50,000 to $150,000 of cash meaningfully expands what you can reach. Going from $250,000 to $500,000 adds almost nothing, because past that point the constraint stops being your cheque and starts being whether the businesses themselves throw off enough earnings. More capital does not keep opening doors.
Business listings publish seller's discretionary earnings, which includes what the current owner pays themselves. A lender does not underwrite that figure. They underwrite what is left after paying someone a market wage to run the business, because you will need to eat.
If you test coverage against the headline SDE, you will conclude that businesses are financeable when they are only financeable if you work for free. Subtract a realistic salary for whoever runs the place before you do any coverage arithmetic.
Everything above is from primary sources, not summaries.
This is general information about published federal rules, not legal, financial or tax advice, and it is not a lending decision. Individual lenders apply their own requirements on top of the SBA's — commonly stricter coverage ratios and more cash down. Rules change; this reflects what was published as of 19 August 2026.
Published by Main Street Diligence. Screening tools for Florida business buyers. This is general information, not legal, financial or tax advice.