Beginning March 1, 2026, the U.S. Small Business Administration (SBA) will restrict its flagship loan programs—like the 7(a) and 504 loans—to businesses that are 100 % owned by U.S. citizens or U.S. nationals whose primary residence is in the United States.

Under the revised policy, lawful permanent residents (green card holders) are no longer permitted to hold any ownership stake (direct or indirect) in businesses seeking SBA‑backed loans.

A notice published by the agency earlier this month explains, “SBA is requiring that 100% of all direct and/or indirect owners of a small business applicant be U.S. Citizens or U.S. Nationals who have their Principal Residence in the United States, its territories or possessions.”

This rule removes a long-standing exception that previously allowed limited minority ownership of up to 5% by non‑citizens (such as E-2 investors) or green card holders under certain conditions.

Officials say the new rules implement President Trump’s January 2025 executive order, “Protecting the American People Against Invasion,” described as an effort to enforce U.S. immigration laws and safeguard public safety.

Although the rule bars access to SBA-backed loans, it does not prevent non-citizens from owning businesses, nor from seeking conventional bank loans or private financing. Immigration concerns may force businesses to restructure ownership or seek more costly alternatives, narrowing opportunities for immigrant entrepreneurs.

As the March deadline approaches, small business owners and advisors must closely monitor these changes, especially those who previously relied on SBA lending to support job creation.

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