SBA to Bar Green Card Holders From Key Loan Programs Starting March 1
The U.S. Small Business Administration (SBA) has announced a significant policy shift that will exclude lawful permanent residents, commonly known as green card holders, from accessing its primary business lending programs. According to a policy notice issued Monday, the agency will require that 100% of a small business’s direct and indirect owners be U.S. citizens or U.S. nationals to qualify for SBA-backed loans, effective March 1, 2026.
The new rule represents a departure from longstanding eligibility guidelines that previously allowed permanent residents to qualify for the SBA’s popular 7(a) and 504 loan programs. These programs do not provide direct cash from the government but offer federal guarantees to lenders, encouraging banks to issue financing to small businesses with more favorable terms than traditional commercial loans.
Under the forthcoming regulations, businesses must be fully owned by citizens or nationals whose principal residence is within the United States or its territories. The policy notice explicitly rescinds a previous guideline released in December 2025, which had permitted up to 5% of a business to be owned by foreign nationals or legal permanent residents while still maintaining eligibility.
SBA officials stated that the policy change aligns with broader administration goals to prioritize economic opportunities for U.S. citizens. In a statement provided to news outlets, SBA spokesperson Maggie Clemmons said the agency is “committed to driving economic growth and job creation for American citizens.”
“Across every program, the SBA is ensuring that every taxpayer dollar entrusted to this agency goes to support U.S. job creators and innovators,” Clemmons said. The agency cited alignment with a January 2025 executive order titled “Protecting the American People Against Invasion,” emphasizing the administration’s focus on enforcing immigration laws and directing federal resources toward citizens.
The announcement has drawn immediate criticism from business advocacy groups, who argue the restriction will hinder economic growth. John Arensmeyer, CEO of the Small Business Majority, warned that the decision could limit job creation, noting that immigrants have historically started businesses at higher rates than native-born citizens.
“The latest decision by SBA fails to recognize that immigrants are twice as likely to start a business as native-born U.S. citizens,” Arensmeyer said in a statement. “Given that reality, SBA’s severe restrictions will have a negative impact on small business creation throughout this country for years to come.”
Lenders and borrowers currently in the application process face a tight deadline. The SBA clarified that any loan application involving a legal permanent resident owner must receive an official SBA loan number before the March 1 cutoff to remain eligible. After that date, lenders will be required to verify the citizenship status of all business owners, and those with any non-citizen ownership—including green card holders—will be ineligible for government backing.
This move follows a year of tightening restrictions at the agency. In 2025, the SBA raised the domestic ownership requirement from 51% to 100%, initially allowing for the small 5% exemption for non-citizens that has now been eliminated. The agency’s 7(a) program typically supports billions of dollars in lending annually, utilized for working capital, equipment purchases, and business expansion.
* thebusinessjournal.com
* cbsnews.com
* greatandhra.com
* middletownpress.com
* mrt.com
* wkyc.com
* starfieldsmith.com
