Small businesses owned by immigrants or individuals with mixed immigration status will soon lose access to some of the most affordable financing options available to them. Starting March 1, 2026, a new rule from the U.S. Small Business Administration will require 100% ownership by U.S. citizens or nationals for businesses seeking SBA 7(a) or 504 loans. This means that lawful permanent residents, also known as green card holders, will no longer be eligible to own any part of a business applying for an SBA loan.
Jeremy Gilpin, president and CEO of Community Bank & Trust, stated via email that this change will significantly reduce access to SBA financing for many small businesses that previously qualified. The new rule mandates that all owners, including indirect owners, must be U.S. citizens or nationals residing primarily in the U.S. or its territories.
Previously, businesses applying for SBA loans needed to be at least 51% owned by U.S. citizens, nationals, or lawful permanent residents. In 2025, the requirement was tightened to 100% ownership by these groups. With the latest change, lawful permanent residents are completely excluded from eligibility.
For current applicants, it is crucial to ensure that SBA loan applications with ownership by lawful permanent residents are fully submitted and approved before March 1. Existing borrowers with SBA loans are not affected by the rule change, but any future ownership modifications must comply with the new requirements.
This rule adjustment could limit access to affordable financing for small businesses owned by lawful permanent residents. These businesses may need to explore alternative financing options such as conventional bank loans, online lenders, or community development financial institutions (CDFIs). However, these alternatives may be more expensive, harder to qualify for, or impractical for some borrowers.
Reduced access to affordable capital can negatively impact local economies by hindering business growth, job creation, and tax revenue. Carolina Martinez, CEO of CAMEO Network, emphasized that when small businesses lack the necessary capital, they cannot achieve their full economic potential.
Business owners affected by the eligibility change should contact their lender immediately if they are in the process of applying for an SBA loan. For those who have not yet applied, exploring alternative financing options like CDFIs or online lenders is recommended. Working with local business support centers or lending marketplaces like Fundera by BW can help compare different products and find the best option for business needs. sentence: Please make sure to lock the door before you leave.
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