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SBA loan update: Big change for foreigners, Green Card holders incoming; details
A new SBA rule mandates that all owners of businesses applying for loans must be US citizens or nationals, eliminating green card holders from eligibility
According to an SBA announcement, a new rule by President Donald Trump's administration will restrict SBA loan eligibility to American-owned businesses. The new rule prohibits non-citizens, including those with green cards, from applying for US Small Business Administration loans.
All SBA loan programs, including major lending programs and smaller assistance programs, will be affected by the move, SBA Administrator Kelly Loeffler announced on Monday. This includes key loan programs such as 7(a), 504, Microloan, and Surety Bond programs.
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What does the new SBA rule mean for foreign business owners?
Under the updated guidance issued by the SBA, all direct and indirect owners of a company applying for an SBA-backed loan must be US citizens or US nationals whose principal residence is in the United States.
Previously, businesses could qualify for such loans if at least 51% of ownership belonged to US citizens or lawful permanent residents, meaning immigrants with green cards could still access federal financing.
Loeffler said, “SBA already implemented citizenship verification to stop illegal aliens from applying for small business loans. Now, we’re implementing a full ban on ALL foreign nationals who want to access our funding.”
In February 2026, the SBA modified its guidance to demand that 100% of the direct and indirect owners of a small business requesting a loan be US residents or nationals, eliminating previous exemptions for enterprises with modest foreign ownership.
Loeffler further said, “American job creators must come first.” The updated policy has become effective on March 1, 2026.
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No ownership interest for Green Card holders
The exclusion of LPRs, also referred to as green card holders, from SBA ownership eligibility is one of the most significant developments. An operating company, an eligible passive company, or an SBA applicant or borrower may no longer be owned by LPRs.
Green card holders were previously regarded as qualified owners under SBA programs, so this represents a significant tightening of previous eligibility requirements.
In reply to Loeffler's move, journalist Nick Sortor wrote on X, “Independent gas stations and hotels will soon be in AMERICAN hands again, as foreigners will no longer get a leg up on Americans for loans to purchase them.”
He further clarifies that Loeffler moved to ban foreigners and non-citizens from taking out SBA-backed small business loans following Loeffler's revelation of $8.8 billion in probable “pandemic fraud from borrowers in California alone.”
