For the first time in its history, the US Small Business Administration (SBA) has restricted loans to immigrant entrepreneurs, including legal permanent residents (Green Card holders).
Starting March 1, 2026, only businesses 100% owned by US citizens can qualify for SBA-backed loans such as 7(a) and 504 programs, which are typically used for equipment, real estate, or working capital.
SBA Administrator Kelly Loeffler said the move is aimed at prioritizing American citizens to drive economic growth and job creation.
Programs Affected and New Rules
The new rules apply to several SBA programs:
7(a) and 504 loans – for working capital, equipment, and business acquisitions
Surety Bond and Microloan programs – now included in the citizenship-only policy
Earlier, businesses partially owned by foreign nationals or Green Card holders could still access SBA loans.
Now, even a 1% ownership stake by a non-citizen disqualifies a business.
In 2025, SBA began verifying citizenship for all loan applications and even moved offices out of sanctuary cities that limit federal immigration enforcement.
Currently, around 3,300 active loans are held by businesses partially owned by legal permanent residents, about 4% of the SBA’s total loans.
Impact on Immigrant Entrepreneurs
The policy has hit immigrant communities hard, especially Indian American entrepreneurs, who are among the most active business owners in the US.
In FY2024, Asian American-owned businesses received over $7 billion in SBA-backed loans.
Many family-run businesses have parents on Green Cards and children as US citizens.
Under the new rule, these businesses may no longer qualify for SBA funding, even if they have a small non-citizen ownership stake.
Entrepreneurs like Aneesa Waheed, who runs five restaurants in New York and New Jersey, have expressed shock.
She highlighted that legal residents contribute to the economy, employ Americans, and pay taxes, yet now face barriers to growing their businesses.
Online reactions from Indian American business owners reflect frustration and concern, with many warning that this policy could slow job creation and limit entrepreneurial growth.
Why the Change Happened
SBA claims its loan capacity is limited and wants to prioritize American citizens who are building businesses domestically.
This policy aligns with Trump-era economic priorities, emphasizing “America First” in small business lending.
Previously, businesses could qualify for SBA loans if 51% of ownership was held by citizens or legal residents.
The new rules now require 100% US citizen ownership, excluding Green Card holders entirely.
Broader Implications
Many franchise owners and small business operators are affected, potentially halting expansion plans.
Alternative loans exist, but they are harder to obtain and often require collateral.
Critics, including the Congressional Asian Pacific American Caucus (CAPAC), have called the policy xenophobic and warned it could slow job creation and innovation.
For immigrant entrepreneurs waiting for citizenship, this move could mean delayed growth, higher costs, and fewer financing options, fundamentally changing how they plan and run their businesses in the US.
