Green card holders excluded from U.S. small business loans under new SBA rules

The U.S. Small Business Administration (SBA) has implemented a new policy that restricts access to guaranteed loans for entrepreneurs who are not U.S. citizens, a move that significantly impacts legal permanent residents, commonly known as green card holders.

Under the revised eligibility rules, businesses applying for SBA-backed loans must be entirely owned by U.S. citizens with their primary residence in the United States. This change affects programs like Microloan and Surety Bond, adding to existing restrictions on the 7(a) and 504 loan programs. SBA Administrator Kelly Loeffler justified the decision by stating the goal is to prioritize job creation for U.S. citizens, drawing a parallel to the citizenship requirement for voting.

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The objective is to prioritize the creation of employment for U.S. citizens.

This policy shift marks a departure from decades of practice, during which green card holders were eligible for SBA loans to start or expand their businesses. In the fiscal year 2025, the SBA approved 3,358 loans for businesses owned by permanent residents, representing 4% of all approvals that year. The new regulations mean these entrepreneurs will no longer qualify for such financing.

Immigrants play a substantial role in U.S. entrepreneurship, constituting about 19% of businesses with employees and nearly 24% of businesses without employees, despite making up roughly 15% of the total population. Organizations like the National Community Reinvestment Coalition and Small Business Majority have voiced concerns, arguing that SBA loans are a vital capital source for many immigrants. They warn that the new restrictions could negatively affect business growth and job generation across the country.

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The decision of the SBA does not recognize that immigrants have a high participation in the creation of small businesses and warns that the new restrictions may affect business growth and job generation in the U.S.