Starting March 1, 2026, green card holders will be ineligible to receive loans backed by the Small Business Administration (SBA), a policy shift that is already drawing criticism from members of Congress. The change, announced in a policy note, effectively bars lawful permanent residents from accessing SBA 7(a) and 504 loan programs, requiring 100% U.S. Citizen or national ownership for applicants.
The SBA’s decision represents a tightening of eligibility requirements that began last year, when the agency increased the ownership requirement for U.S. Citizens, nationals, or lawful permanent residents to 100% from a previous 51% standard. A December policy note had briefly allowed for up to 5% non-citizen ownership, but that provision has now been rescinded.
SBA spokesperson Maggie Clemmons stated the new rule is intended to align with Executive Order 14159, “Protecting American Citizens from Foreign Adversaries,” and to ensure that taxpayer dollars are directed towards supporting U.S. Job creators, and innovators. “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 in an emailed statement.
The move has sparked immediate condemnation from some lawmakers. Senator Edward J. Markey and Representative Nydia Velázquez, both members of the Small Business Committees in their respective chambers of Congress, publicly criticized the SBA’s decision, characterizing it as discriminatory. They argued that the policy effectively “opts for animus” by excluding legal immigrants from accessing public financing intended to support business creation and expansion.
The SBA does not directly issue loans, but works with lenders to distribute funds to small businesses, often at more favorable rates than traditional loans. Industry observers, such as Jeremy Gilpin, president and CEO of Community Bank & Trust, have noted that the change will “materially reduce access to SBA financing for many small businesses” that previously qualified. The new rule applies to all ownership levels, including indirect ownership.
The policy change comes as the SBA continues to restructure the agency and tighten loan restrictions. The agency has not yet responded to requests for further comment on the potential economic impact of the new rule or the specific number of businesses and individuals expected to be affected.