Policy Change Excludes Green Card Holders from SBA Loan Eligibility
As of March 1, small business owners who are legal permanent residents (LPRs) will no longer qualify for loans from the Small Business Administration (SBA).
This alteration signifies a departure from longstanding eligibility criteria, disproportionately impacting enterprises founded by immigrants, reports The Business Journal.
Announced on February 2, this policy mandates that 100% of the direct and indirect owners of businesses applying for loans must be U.S. citizens or nationals residing in the United States or its territories. As a result, green card holders are now excluded from eligibility.
The key loans affected by this modification comprise the 7(a) loans, which are traditionally utilized for general business purposes, including working capital and equipment acquisition.
Additionally, 504 loans—primarily engaged in financing commercial real estate and heavy machinery—are encompassed by the new directive.
The regulation applies to all eligible borrowers and encompasses both operating companies and passive companies, considering both direct and indirect ownership stakes.
Businesses with LPR ownership must secure an SBA loan number prior to March 1 to maintain eligibility.
While the SBA asserts that the adjustment aligns with federal statutes and Executive Order 14159, titled “Protecting the American People Against Invasion,” administrator Kelly Loeffler has indicated that these changes mirror the administration’s broader objectives, according to Inc.
“Under President Trump, the SBA is focused on prioritizing American citizens once again—beginning with the assurance that taxpayer funds are not used to support illegal immigration,” Loeffler articulated.
Countering this perspective, Frank Gallegos, executive director of the Cen Cal Business Finance Group, remarked, “This viewpoint is far from realistic.”
He urged those affected to engage with their elected representatives, emphasizing the contributions of legally immigrated individuals who seek to fulfill the American dream.
Democratic lawmakers, including Senate Small Business Committee Ranking Member Edward Markey (D-MA) and House Small Business Committee Ranking Member Nydia Velázquez (D-NY), have criticized this measure as a direct affront to immigrant entrepreneurs.
“The Trump administration’s actions are inflaming animosity and fostering uncertainty among immigrant populations and small enterprise proprietors,” the legislators contended in a joint statement.
In December 2025, the SBA had initially proposed allowing up to 5% foreign national ownership while specifically prohibiting ownership by Chinese nationals, yet subsequently reversed this decision entirely with the implementation of the new policy.
“Instead of supporting diligent legal immigrants in their pursuit to launch or grow businesses, the Trump SBA has opted for exclusionary measures targeting green card holders seeking SBA loans,” Markey and Velázquez declared.
Source link: Yahoo.com.
