Starting from April, the Small Business Administration (SBA) in the United States will only accept loan applications from American citizens and U.S. nationals, and companies with Green Card holders as shareholders will lose their eligibility.
This new regulation introduced since March 1 of this year has gradually taken effect, covering all SBA-guaranteed loans from April. It requires that all direct or indirect owners of businesses must be American citizens or U.S. nationals whose primary residence is in the United States or its territories, including individuals born in American Samoa and Swains Island.
The restricted loan programs include 7(a) loans, 504 loans, Microloans, and Surety Bonds, among others. Even if non-U.S. citizens or Green Card holders only own 1% of the shares in a company, this will result in the business losing the eligibility to apply for financing guaranteed by the SBA.
Established in 1953, the core mission of the SBA has always been to assist Americans in starting, building, and expanding various types of businesses.
California has the largest immigrant population in the U.S. and a high number of small businesses, with some businesses being owned by immigrants. SBA loans typically offer lower interest rates, and previously, Green Card holders and certain non-citizens could apply for SBA loans, with some applicants even without established credit records.
After the implementation of the new regulation, small business owners or partners who are not 100% Americans will lose their eligibility. It is estimated that around 5%-15% of business owners in the U.S. are Green Card holders, with a higher percentage in California. These individuals operate small businesses such as restaurants, bakeries, medical clinics, law firms, car dealerships, and nail salons.
According to the Governor’s Office in May 2023, small businesses in California account for over 99% of all businesses in the state, employing over 7 million workers, nearly half of the private sector workforce in the state. Information from “caimmigrant.org” shows that immigrant entrepreneurs in California accounted for up to 40% in 2023, owning 880,999 businesses which generated $28.4 billion in revenue, helping California become the world’s fourth-largest economy.
The national small business advocacy group, Small Business Majority, wrote to the SBA in mid-March urging the federal agency to reconsider and take into account the key economic data on the powerful contributions of immigrant groups in job creation. Some organizations also signed the letter in support.
SBA spokesperson Maggie Clemmons stated that the new regulation will help more American citizens access funds that were previously allocated to non-citizens. In the fiscal year 2025, the SBA approved 3,358 loans to finance small businesses with Green Card holders as shareholders, accounting for 4% of the total approved loans by the agency.
According to CalMatters, Carolina Martinez, the CEO of the national organization CAMEO Network dedicated to supporting small businesses, pointed out that SBA’s policies could impact around 220,000 Green Card-holding small business owners in California.
The San Diego Regional Chamber of Commerce noted that in response to the new regulation, the organization is working towards advocating for immigration reform, including establishing standardized pathways to citizenship.
If loan applicants have a good credit history, provide collateral, and demonstrate good business performance, banks may be willing to provide loans to Green Card holders. Other potential avenues for loans include community financial institutions and applying for loans from state or local governments.
In 2020, California established the SEED program, aimed at promoting economic development for social entrepreneurs, specifically supporting immigrant groups in launching and growing their businesses. The program’s first and second phases have already received a cumulative investment of $30 million; in July 2025, Governor Newsom approved an additional $7.5 million in funding in the state budget.