The Small Business Administration (SBA) of the United States recently revised its loan program guidelines, tightening eligibility requirements starting from March 1, 2026. The new rule stipulates that all loan applicants must be either U.S. citizens or nationals. This revision will disqualify lawful permanent residents (green card holders) and other non-citizen small business owners from applying for SBA loans, potentially impacting millions of immigrant-operated small businesses across the country.
According to the latest SBA policy, effective March 1, 2026, all owners holding any percentage of equity in businesses applying for federal small business loan programs (including the primary 7(a) and 504 loan programs) must be U.S. citizens or nationals and reside primarily in the U.S. or its territories. This means that even if only 1% of the equity in a business is held by a green card holder, the business will lose its loan eligibility.
Previously, SBA policy allowed green card holders to apply for loans and permitted non-citizens to hold up to 5% of business equity without affecting loan eligibility. However, the new revised policy outright excludes green card holders and other non-citizen business owners, including Chinese citizens, marking a significant change in eligibility for federal small business loans.
Statistics show that there are currently over 3 million Asian American, Native Hawaiian, and Pacific Islander (AANHPI) operated small businesses in the U.S., generating nearly $1 trillion in economic activity and employing approximately 5.2 million workers. Many of these businesses are operated by immigrant families and rely on federal loan support for entrepreneurship and expansion.
Federal data indicates that in the 2024 fiscal year alone, the SBA provided approximately 8,900 loans totaling $7.2 billion to Asian American businesses. Since 2020, the number of Asian American businesses receiving SBA loan support has increased by around 70%.
Congresswoman Meng Zhao-wen has expressed that this policy change will have a significant impact on immigrant communities and small businesses. She pointed out that 65% of Asian Americans are foreign-born, and many small businesses are run by immigrant families. The new policy could limit these businesses’ access to the necessary funds for growth.
In a statement, Meng Zhao-wen said, “The United States has long been seen as a land of opportunity, allowing hard-working individuals to create a better future for their families. Restricting legal immigrants’ access to funding for entrepreneurship will affect millions of families and small businesses.”
Analysts point out that SBA loans are an important financing channel through which the federal government supports small businesses. The new policy may change the way immigrant businesses access funds and pose challenges to some small businesses that rely on loans for starting up or expanding.
SBA has not clarified whether the new regulation will affect existing loans or approved applications. The new rule will officially take effect on March 1, 2026.