Best Practices: SBA Expands International Trade Loan Program

Effective May 1, 2026, the U.S. Small Business Administration (SBA) expanded access to its 7(a) International Trade Loan (ITL) Program by broadening eligibility for certain domestic manufacturers and food supply chain businesses. SBA Policy Notice 5000-877629.  Historically, the ITL program has focused on supporting small businesses seeking to develop or expand export markets. The program provides an enhanced 90% SBA guaranty for eligible loans. Under the revised policy, SBA has expanded the program to include qualifying businesses that are adversely affected by international trade, even if they are not engaged in export activities.

The ITL program has long offered enhanced credit, but participation has been limited because borrowers generally were required to demonstrate that loan proceeds would support export expansion or that the business had been adversely affected by import competition.  The policy change follows SBA’s review of U.S. manufacturing and the domestic food supply chain pursuant to Executive Orders 13806 and 14364. Based on that review, SBA concluded that businesses operating within NAICS Sectors 31-33 (Manufacturing), together with certain NAICS industry groups and national industry codes within the food supply chain, are adversely affected by international trade. SBA cited evidence that these industries have experienced increased foreign competition, declines in the number of operating firms, reduced employment, and competitive pressures from imported products.

SBA has determined that businesses within these designated industries satisfy the statutory requirement of being “adversely affected by international trade.” As a result, SBA lenders may rely on the agency’s determination when evaluating eligibility for the ITL program rather than documenting trade-related injury on an individual borrower basis. This change is aimed at reducing underwriting complexity while expanding the pool of borrowers eligible for the program’s enhanced guaranty.

According to the notice, the expanded eligibility is intended to facilitate financing for investments that improve productivity, modernize technology, diversify supply chains, and expand production capacity for U.S.-owned manufacturers. For qualifying businesses within the food supply chain, the program will also support investments that improve productivity, strengthen supply chain resilience, and enhance competitiveness.  The simplified eligibility determination should make the ITL program an attractive financing option for manufacturers seeking to modernize facilities, purchase equipment, increase production capacity, diversify suppliers, or make other investments necessary to compete with lower-cost foreign producers.

The notice does not change the ITL program’s export financing component. Businesses seeking financing to develop or expand export markets remain eligible for the program. Instead, the notice expands the circumstances under which businesses may qualify by recognizing that certain manufacturing and food supply chain industries have been determined by SBA to be adversely affected by international trade.

Given the reduced eligibility burden and enhanced credit support, lenders may wish to revisit the ITL program as a financing tool for clients that previously may not have qualified or for whom the additional documentation requirements made the program less practical. For more information on the ITL, contact the attorneys at Starfield & Smith, PC at 215.542.7070 or visit us at www.starfieldsmith.com.