United States Green Card Holders Set To Lose Access To SBA Loans

By Kekeletso Nkele, small.news Assistant

(small.news) — The United States Small Business Administration (SBA) will end access to SBA-backed loans for green card holders starting March 1, 2026, The Economist Times reported.

Under a revised Standard Operating Procedure (SOP) 50 10 8, the agency now requires that 100% of all direct and indirect owners of a loan applicant be U.S. citizens or U.S. nationals residing in the United States or its territories. The change eliminates long-standing eligibility for legal permanent residents.

What Changed

The SBA rescinded Procedural Notice 5000-872050, which previously allowed up to 5% foreign ownership in SBA-eligible businesses. The policy update aligns with Executive Order 14159, “Protecting the American People Against Invasion.”

Agency officials said the change strengthens citizenship verification and ensures federal loan support is limited to businesses fully owned by U.S. citizens or nationals.

Impact on Small Businesses and Concerns From Lenders

The reality is that changing ownership is nearly impossible: Taxes, legal, and government risks are just a few of the problems small business owners face. Especially if your business falls under a capital-heavy sector.

Legal permanent residents have historically qualified for SBA loans. Many immigrant-founded businesses relied on SBA guarantees to reduce lender risk and secure lower borrowing costs. Those loans commonly financed manufacturing facilities, warehouses, cold storage operations, and industrial redevelopment projects.

Lenders estimate 5% to 15% of SBA loans involve green card holders, with higher exposure in manufacturing, agriculture, and logistics. Immigrants make up roughly 14% of the U.S. population but account for more than 20% of small business owners, according to economic research.

Lenders warn the rule could raise borrowing costs, reduce lending activity, and slow job creation in capital-intensive sectors.