February 4, 2026
Opponents say the change contradicts the agency’s mission of supporting the growth of small businesses.
Small businesses owned by legal permanent residents (LPRs), or green card holders, will no longer be eligible for Small Business Administration (SBA) loans as of March 1, a move that terminates longstanding eligibility rules and targets immigrant-founded businesses, The Business Journal reports.
The policy change, announced Feb. 2, now requires 100% of direct and indirect owners of loan applicants to be U.S. citizens or U.S. nationals residing stateside or within U.S. territories. Green card holders are no longer eligible.
The two primary loans in question are 7(a) loans, typically used for general business purposes such as working capital and equipment. Then there are 504 loans, used primarily for purchasing commercial real estate and heavy equipment. The new rule applies to eligible borrowers, operating companies, and passive companies, including direct and indirect ownership interests. Loans involving LPR owners are required to receive an SBA loan number prior to March 1 in order to stay eligible.
While the SBA claims the update is in accordance with federal regulations and Executive Order 14159 “Protecting the American People Against Invasion,” administrator Kelly Loeffler said the changes reflect the current administration’s goals, according to Inc.
“Under President Trump, the SBA is committed to putting American citizens first again—starting by ensuring that zero taxpayer dollars go to fund illegal aliens,” Loeffler said.
“It’s not very realistic at all,” executive director of Cen Cal Business Finance Group, Frank Gallegos, countered.
“This past year has been the opposite direction,” he explained, urging those impacted to contact their elected officials. “These people legally immigrate, they come here, they’re living the American dream.”
Congressional Democrats such as Senate Small Business Committee Ranking Member Edward Markey (D-MA) and House Small Business Committee Ranking Member Nydia Velázquez (D-NY) say the change is an attack on immigrant entrepreneurs.
“The Trump administration is stoking the flames of hatred, spreading fear and confusion among immigrants and small business owners,” the lawmakers said in a statement. In December 2025, the SBA announced plans to permit up to 5% foreign national ownership while banning Chinese citizens specifically, and then reversing the plan entirely with the new policy.
“Rather than support hard-working legal immigrants to start or expand a business, the Trump SBA is choosing hatred by barring green card holders from receiving an SBA loan,” Markey and Velázquez said.
RELATED CONTENT: Small Business Administration Tells Laid-off Workers They’re Working Again, Then Rescinds Offer
