June 15, 2026
This marks a shift that immigration advocates and business owners say could significantly restrict access to capital for thousands.
Legal permanent residents are no longer eligible for U.S. Small Business Administration-backed (SBA) loans under a policy change implemented in March 2026. This marks a shift that immigration advocates and business owners say could significantly restrict access to capital for thousands of entrepreneurs, NPR reports.
The rule, announced by the Small Business Administration (SBA) on March 9, limits eligibility for SBA-backed lending programs to businesses that are fully owned by U.S. citizens or U.S. nationals. The change reverses an earlier policy that allowed lawful permanent residents, commonly known as green card holders, to apply for and receive federal small-business loans.
According to the outlet, the policy is part of a broader federal effort to tighten eligibility standards for public benefits and lending programs tied to immigration status.
The SBA’s 7(a) and 504 loan programs, two of the agency’s primary financing tools, are affected by the rule. Those programs are widely used by small businesses to fund startup costs, purchase equipment, acquire property, or expand operations. Under the updated policy, even partial ownership by a noncitizen who is not a U.S. national can disqualify a business from receiving SBA-backed financing.
The agency has said the changes are intended to ensure federal lending programs prioritize U.S. citizens. However, critics argue the policy narrows access to capital for long-established business owners who are legally authorized to live and work in the United States.
In announcing the policy change, the SBA referred to permanent residents as “foreign nationals.”
Immigration and business advocates warned the rule could have broader economic consequences, particularly in states with large immigrant populations and high rates of small-business formation, including California. They said the restriction could limit entrepreneurship and reduce access to lower-cost federal lending options that many startups rely on in early stages.
Some immigrant entrepreneurs told NPR that they were concerned about the uncertainty the policy creates, particularly for business owners who have historically depended on SBA-backed loans to scale operations or stabilize cash flow.
“The SBA led me to my success of the American dream,” said entrepreneur Sayuri Tsuchitani, who took advantage of a pandemic-era funding program to open a Japanese head spa.
While the rule does not prevent noncitizens from owning businesses or seeking private financing, SBA-backed loans are often considered more accessible than conventional bank loans due to federal guarantees and comparatively favorable terms.
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