Would this cover a loan a non-Jew made to a Jew.
No, it's only intertribe loans. In fact, it's only biblically in effect at the time that Yovel (the Jubilee year) is in effect, which is when the majority of the Jewish people reside in Israel. This hasn't been the case in thousands of years, since the middle of the time of the Bayis Sheini (Second Temple). Today, it only exists as a rabbinic ordination, to keep the law from being forgotten. Being as people were desisting from loaning money to those in need because of this cancellation policy the sage Hillel instituted a procedure called pruzbul. (Pruzbul actually refers to the document used.) The essential factor behind the institution is that only personal loans are cancelled, money owed to Beis Din (the court) or Tzedaka (charity) is not cancelled. The pruzbul is a document giving over the loans to the Beis Din. In turn, they give you the power of attorney to collect these loans, add they have the right to do. This "workaround" only works because the whole loan cancellation today is only Rabbinic, to ensure that it not be forgotten. The rabbis were balancing the maximum benefit, so they also factored in that people wouldn't lend due to this, so they allowed this leeway in their ordination.
