In a major policy change, the US Small Business Administration (SBA) has announced that non-US citizens, including green card holders, will no longer be eligible for SBA-backed business loans.
The revised rules were issued on February 2, 2026, and will come into effect from March 1, 2026. The move tightens ownership and eligibility norms under key SBA lending programmes and aligns with President Donald Trump’s “America First” economic policy.
In its policy notice, the SBA said the changes are meant to strengthen its mission of supporting American citizens in starting and growing businesses. The new framework sharply limits the role of non-citizens in businesses that seek government-backed loans.
SBA loans are not given directly by the government. Instead, the SBA guarantees a portion of loans provided by banks and approved lenders, making it easier for small businesses to access credit at better terms.
What Has Changed?
Under the revised SOP 50 10 8 rules, 100% ownership of a business applying for an SBA loan must now be held by US citizens or US nationals who live in the US or its territories.
The new policy completely excludes legal permanent residents (LPRs) from holding any ownership stake in a business seeking SBA financing.
Earlier, a December 2025 rule allowed up to 5% foreign or green card ownership under certain conditions. That exception has now been withdrawn.
“SBA is requiring that 100% of all direct and indirect owners of a small business applicant be US citizens or US nationals,” said SBA Administrator Kelly Loeffler.
The latest notice also cancels earlier guidelines that allowed limited non-citizen participation.
Part of Wider Immigration Push
The change comes amid the Trump administration’s tougher stand on immigration and increased focus on prioritising citizens in federal programmes. Observers see the SBA decision as part of a broader shift to restrict benefits for non-citizens.
Impact on Indian Immigrants
Indian-origin entrepreneurs are expected to be among the most affected by the new rule. Indians form one of the largest groups of green card holders in the US and have a strong presence in small businesses.
India was the second-largest source of green card holders in FY 2024
Nearly 60% of US hotels are owned by Indian-origin entrepreneurs
Indian American businesses generate over $150 billion in annual revenue and employ more than 8 lakh people
About 40% of US small business owners are foreign-born
With the new rule, thousands of immigrant-run businesses may now lose access to a key source of funding, raising concerns across the small business and immigrant communities.