Starting March 1, 2026, businesses with any ownership by green card holders will lose access to US government-backed small business loans.
This change comes after the US Small Business Administration updated its citizenship and residency requirements for borrowers.
Green Card Holders Barred from SBA-Backed Small Business Loans Starting March 1, 2026
The revised policy affects major SBA loan programs and applies regardless of how small the ownership stake held by a lawful permanent resident may be.
An official SBA policy notice announcing the change was released on February 2, 2026.
Under the new rules, 100% of both direct and indirect owners of a business applying for SBA-backed loans must be either US citizens or US nationals.
In addition to citizenship status, all qualifying owners must have their primary residence within the United States or its territories.
As a direct result, lawful permanent residents will be prohibited from holding any ownership interest in a business seeking SBA-supported financing after the effective date.
The policy update amends Standard Operating Procedure 50 10 8, which governs SBA lender and development company loan programs.
SBA Withdraws Policy Allowing Limited Foreign or Non-Resident Ownership
Alongside this revision, the SBA has withdrawn an earlier procedural notice that previously allowed limited ownership by foreign nationals or certain non-resident individuals.
The SBA explicitly stated in the notice: “Legal Permanent Residents (LPRs) will not be eligible to own any percentage interest in an Applicant/Borrower, OC, or EPC.”
According to the agency, the tightened eligibility criteria are intended to bring SBA loan rules in line with existing federal regulations and a recent executive order.
The decision directly impacts small businesses that are fully or partially owned by green card holders, making them ineligible for SBA-backed financing.
This includes widely used loan options that are particularly important for startups and early-stage companies.
Businesses that already rely on SBA loans—or plan to apply in the future—will need to reassess and potentially restructure their ownership to remain eligible.
The SBA clarified that the updated policy applies only to new loan applications submitted on or after March 1, 2026.
For further clarification or guidance, the SBA advised that inquiries regarding the policy change should be directed to local SBA field offices.
