Starting March 1, 2026, businesses that have any ownership by green card holders will no longer be eligible for US government-backed small business loans.
This change follows an update by the US Small Business Administration (SBA) to its borrower eligibility rules.
What Has Changed in SBA Loan Rules?
The SBA has revised its citizenship and residency requirements for businesses applying for SBA-backed loans.
Under the new policy:
All owners, both direct and indirect, must be US citizens or US nationals
Even a small ownership stake held by a lawful permanent resident makes a business ineligible
All qualifying owners must have their primary residence in the US or its territories
As a result, green card holders cannot own any percentage of a business seeking SBA-supported financing.
Which Loan Programs Are Affected?
The updated rule applies to major SBA loan programs, including those commonly used by startups and early-stage businesses.
The policy change amends Standard Operating Procedure 50 10 8, which governs SBA lender and development company loan programs.
An official notice announcing the change was released on February 2, 2026.
Earlier Ownership Allowances Have Been Withdrawn
Along with the new rule, the SBA has withdrawn an earlier policy that allowed limited ownership by foreign nationals or certain non-resident individuals.
The agency clearly stated that Legal Permanent Residents are no longer eligible to hold any ownership interest in businesses applying for SBA loans.
According to the SBA, the tighter rules are meant to align loan eligibility with federal regulations and a recent executive order.
What This Means for Small Businesses
Small businesses that are fully or partially owned by green card holders will now be ineligible for SBA-backed financing.
Businesses that already depend on these loans—or plan to apply in the future—may need to restructure their ownership to remain eligible.
It is important to note that the new rules apply only to loan applications submitted on or after March 1, 2026.
Where to Get More Information
For specific guidance or clarification, the SBA has advised business owners to contact their local SBA field office.
With this policy shift, many businesses will need to rethink their financing plans before the new rules take effect.
