NRI PULSE STAFF REPORT
Washington, DC, February 4, 2026: The U.S. Small Business Administration (SBA) has announced a policy change that will make businesses with any ownership by green card holders ineligible for government-backed small business loans beginning March 1, 2026.
Under the revised rule, all direct and indirect owners of a business applying for SBA-guaranteed loans — including the popular 7(a) and 504 loan programs — must be U.S. citizens or U.S. nationals. Legal permanent residents, commonly known as green card holders, will be barred from owning even a 1 percent stake in an applicant business.
The change was outlined in a policy notice issued by the SBA earlier this month, rescinding earlier guidance that had allowed limited non-citizen ownership in certain cases. Loans that receive an SBA loan number before the March 1, 2026, effective date may still qualify under the current rules, but new applications submitted after that date must meet the stricter ownership requirement.
SBA Administrator Kelly Loeffler said the policy update is intended to ensure compliance with federal regulations and align the agency’s lending programs with national security priorities. The SBA emphasized that the rule applies only to eligibility for government-guaranteed loans and does not prohibit green card holders from owning or operating businesses in the United States.
Lenders and small-business advocates, however, have raised concerns about the impact on immigrant-owned businesses, noting that lawful permanent residents play a significant role in entrepreneurship and job creation. Critics warn the policy could force ownership restructuring, delay business expansion plans, or push affected entrepreneurs toward private financing options, which often come with higher interest rates and fewer protections.
The SBA loan programs are among the most widely used sources of startup and expansion capital for small businesses in the United States, particularly for first-time entrepreneurs who may lack access to traditional bank financing.
The rule change is an administrative action by the SBA and does not require congressional approval.
