Under new immigration laws, lawful permanent residents or green card holders will not be eligible for or have access to United States (U.S.) government small business loans.
The new law becomes effective on March 1, 2026, following a recent policy decision by the U.S. Small Business Administration (SBA).
Under this new rule, announced in an official SBA statement on Feb. 2, 2026, backed US loan programs will be limited exclusively to businesses that are 100 percent owned directly by United States citizens or nationals whose principal residence is in the United States or its territories.
The changes affect several key small business lending programs and apply broadly to any business with ownership ties to lawful permanent residents. Even a minority stake held by a green card holder will render a business ineligible for a Small Business Administration loan backed financially after the effective date.
The policy revises Standards Operating Procedure (SOP) 50 10 8, which governs SBA lender and development company loan programs. It also rescinds a prior procedural notice that had permitted limited ownership by foreign nationals or certain non-citizen residents, including lawful permanent residents.
In its notice, the SBA explicitly states that “Legal Permanent Residents (LPRs) will not be eligible to own any percentage interest in an Applicant/Borrower, OC (Over-collateralization), or EPC (Eligible Passive Company).”
The agency said the update is intended to align SBA loan eligibility requirements with existing federal regulations and a recent executive order, though it did not elaborate further on the orders’ scope.
This decision is expected to have significant implications for immigrant entrepreneurs, particularly those who rely on SBA-backed loans to start, expand, or stabilize small and early-stage businesses. SBA programs are widely used for working capital, equipment purchases, commercial real estate, and refinancing.
Businesses with current or prospective SBA financing will need to reassess and, if necessary, restructure their ownership arrangements to remain eligible once the policy takes effect. It is worth noting that the SBA emphasized that the new requirements apply only to new loan applications submitted on or after March 1, 2026.
The agency advised affected business owners and lenders to direct questions regarding the policy change to their local SBA field officers.
The move marks a notable tightening of federal small-business lending rules and represents a significant shift in access to capital for lawful permanent residents who have long been active contributors to the U.S. small-business economy.
