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Green Card alert: No business loans for lawful permanent residents from March 1 - Will Indians be impacted?
SBA's revised rules eliminate foreign ownership exceptions, affecting many Indian immigrant entrepreneurs in the US.
The US Small Business Administration (SBA) has updated a previously announced clause concerning small business ownership for enterprises owned by non-US citizens. This government agency, which assists “Americans in starting, building, and growing businesses,” has reinforced US President Donald Trump’s ‘America First’ initiative by releasing a new policy notice on Monday, February 2 (US time).
The SBA’s modification of Standard Operating Procedure (“SOP”) 50 10 8 Lender and Development Company Loan Programs guidance concerning businesses owned by non-US citizens is set to take effect on March 1, 2026.
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Will Indians be impacted?
Immigrants originating from India are likely to be one of the most impacted diaspora groups in the US, given that the South Asian nation remains the leading source of migrants globally due to its extensive population.
“SBA is requiring that 100% of all direct and/or indirect owners of a small business applicant be US Citizens or US Nationals who have their Principal Residence in the US, its territories, or possessions,” stated US SBA Administrator Kelly Loeffler in the recent policy announcement.
This revision of guidance occurs during a period when the Trump administration is emphasizing its strict immigration policies and extensive deportation efforts within the US. With this significant change, the new notice has nullified the earlier Procedural Notice 5000-872050 Update to SOP 50 10 8, which outlined the citizenship and residency criteria for applicants.
According to the now-revoked December 2025 notice's limited exception, a borrower could have up to 5% ownership held by foreign nationals, US citizens, US nationals, or Legal Permanent Residents (LPRs) whose “principal Residence is outside of the United States, its territories, or possessions, as well as by Aliens with Conditional LPR status.” However, it is important to note that Chinese nationals were explicitly excluded from the 5% foreign national ownership even at that time.
The notice, which was issued this week, states: “Further, and beginning with the Effective Date of this Notice, Legal Permanent Residents (LPRs) will not be eligible to own any percentage interest in an Applicant/Borrower, OC, or EPC.”
Indian-Americans' business ownership in US
India ranked as the second-largest country of origin for immigrants who received a green card in the fiscal year 2024, as per data from the US Citizenship and Immigration Services.
According to updated statistics from the US Chamber of Commerce in June 2025, 40% of small business owners are foreign-born.
A significant portion of hotel establishments in the United States is owned and managed by entrepreneurs of Indian descent.
Moreover, a report from the National Foundation for American Policy in 2022 states that businesses owned by Indian Americans produce more than $150 billion in yearly revenue and provide employment for over 800,000 people across the country.
