The US Small Business Administration (SBA) has announced a major policy change that will affect businesses owned by non-US citizens.
The update follows President Donald Trump’s “America First” agenda and was officially released on February 2, 2026.
Under the new rule, green card holders will no longer be allowed to own any part of a business that applies for SBA loans.
This decision is expected to impact thousands of immigrant entrepreneurs across the US.
The revised policy will come into effect from March 1, 2026.
What the New SBA Rule Says
According to the new notice, the SBA now requires that 100 percent ownership of a business must be held by US citizens or US nationals.
Owners must also have their main residence in the United States or its territories.
This means that Legal Permanent Residents (green card holders) are no longer eligible to own even a small percentage of an SBA loan-supported business.
Earlier rules allowed up to 5 percent ownership by foreign nationals or green card holders living outside the US.
That exception has now been completely removed.
Why This Is a Big Blow for Immigrant Entrepreneurs
This policy change comes at a time when the US government is tightening immigration rules.
Experts say the move will make it much harder for immigrants to access affordable business loans.
Many green card holders who already have SBA loans may now be forced to transfer ownership to US citizens or look for private financing, which is often more expensive.
Industry leaders have warned that this could slow down small business growth and discourage legal immigrants from starting businesses in the US.
Strong Reactions From Business Leaders and Lawmakers
Frank Gallegos, head of Cen Cal Business Finance Group, said the change was shocking.
He noted that nearly 10 percent of his company’s SBA loans involve green card holders.
Democratic lawmakers have also criticised the move, calling it an attack on immigrant entrepreneurship and the American dream.
They argue that immigrants play a key role in job creation and economic growth.
Why Indians Will Be Among the Most Affected
Indians are one of the largest immigrant groups in the US.
Government data shows that India was the second-largest source of green card holders in 2024.
Nearly 40 percent of small business owners in the US are foreign-born.
Indian-origin entrepreneurs, in particular, dominate sectors like hospitality.
Reports suggest that around 60 percent of hotels in the US are owned by people of Indian origin.
Indian-American businesses also generate over $150 billion in annual revenue and employ more than 800,000 workers.
With the new SBA rule, many of these entrepreneurs may now face serious funding challenges.
