Green card holders in the U.S will no longer be eligible for SBA loans

Abu Sabet: Lawful permanent residents commonly known as green card holdersare no longer eligible to receive loans backed by the U.S. Small Business Administration (SBA), under a new federal policy change.

According to the revised guidance, all applicants for SBA-backed loan programs must now be U.S. citizens or U.S. nationals and maintain their principal residence in the United States or its territories. The rule also disqualifies any small business from receiving SBA financing if even a one percent ownership stake is held by a green card holder.

The policy marks a significant shift from previous guidelines, which allowed lawful permanent residents to qualify for assistance under programs such as the SBA’s 7(a) and 504 loan initiatives. Small business advocates say the change could impact thousands of immigrant entrepreneurs who rely on SBA loans to start or expand their businesses.

SBA-backed loans are widely considered a critical source of capital for small businesses, often offering lower interest rates and longer repayment terms than conventional financing. For many immigrant-owned businesses, particularly in sectors such as retail, food service, construction, and childcare, access to these loans can determine whether a business opens its doors or remains shuttered.

Business groups and immigrant advocacy organizations have expressed concern that the new rule may limit economic growth and job creation, noting that lawful permanent residents pay taxes and contribute significantly to local economies.

The SBA has not announced any transition period for pending applications submitted prior to March 1, leaving affected applicants seeking alternative financing options through private lenders or community-based programs.

America has long prided itself on being a nation where hard work, determination, and ingenuity can lead to opportunity. Immigrants have always been central to that promise—building businesses, creating jobs, and strengthening communities across the country. A new policy from the Small Business Administration (SBA) threatens to undermine that legacy and inflict lasting damage on both immigrant families and the U.S. economy, says a statement released by the Congress Asian American

Beginning March 1, 2026, the SBA will require all loan applicants to be U.S. citizens or U.S. nationals and to maintain their principal residence in the United States or its territories. Under this revised guidance, a small business will be disqualified from SBA loan eligibility if a legal permanent resident—commonly known as a green card holder—owns even one percent of the business.

This change represents a dramatic and harmful departure from prior policy. Until now, the SBA’s 7(a) and 504 loan programs allowed green card holders or foreign nationals owning up to five percent of a business to qualify for assistance. Even more troubling, previous guidance singled out Chinese nationals as categorically ineligible—raising serious concerns about discrimination and bias embedded in federal policy.

The consequences of these changes will be devastating, particularly for the Asian American, Native Hawaiian, and Pacific Islander (AANHPI) community. Sixty-five percent of Asian Americans are foreign-born, and more than 3 million AANHPI-owned small businesses operate across the United States. These businesses employ 5.2 million workers and generate nearly a trillion dollars in economic activity annually. They are neighborhood restaurants, family-run retail shops, childcare centers, and technology startups—cornerstones of local economies in every region of the country. Rep. Grace Meng of New York, Chair of the Congressional Asian Pacific American Caucus, condemned the policy: “America has long stood as the land of opportunity, where hard work opened the door to a better life for you and your family,” she said. “The SBA’s decision to deny hard-working legal immigrants the capital they need to start or grow a business will effectively lock millions of Asian American, Native Hawaiian, and Pacific Islander (AANHPI) families out of the American Dream.”

Access to capital is not a luxury for small businesses—it is a necessity. SBA-backed loans often mean the difference between opening a storefront or staying shuttered, between hiring new workers or laying people off, between surviving economic downturns or closing permanently. By excluding green card holders and other non-citizens, the SBA is cutting off thousands of viable, job-creating businesses from one of the federal government’s most important economic tools. Immigrant-led businesses are among the most entrepreneurial in the country, and their success benefits everyone. In fiscal year 2024 alone, the SBA backed 8,900 loans to Asian-owned businesses totaling $7.2 billion, with the number of Asian businesses funded increasing dramatically from prior years. These investments fueled growth, expanded payrolls, and strengthened local economies. The new policy threatens to reverse that progress overnight.

Many of the businesses affected are family enterprises, run by immigrant parents alongside their U.S.-born children. Under the SBA’s revised rules, those American children could be denied access to capital simply because a parent holds a green card instead of a passport. That outcome is not only economically reckless—it is fundamentally un-American.

Rep. Meng warned, “This cruel decision is rooted in xenophobia and will only weaken our economy, hurt job creation, and stifle the spirit of entrepreneurship that makes our country great.”

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