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By Mandy Taheri
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The Small Business Administration (SBA) said in Monday policy note that green card holders will not be eligible to apply for SBA loans next month.
Newsweek has reached out to the SBA press team for comment via email on Wednesday.
Why It Matters
The SBA is a federal agency created in 1953 that helps Americans start and build small businesses. In addition to working with lenders to distribute loans, it provides Americans with counseling and contracting expertise.
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The change follows tighter lending guidelines the agency adopted last year and comes as the Trump administration ramps up immigration enforcement, including cases involving legal permanent residents who have been detained or placed in deportation proceedings.
What To Know
The policy note states that green card holders “will not be eligible to own any percentage interest in an Applicant/Borrower,” operating company or eligible passive company, thereby having no ownership stake in a business applying for a loan starting on March 1. The rule means if even 1 percent of a business is owned by a green card holder, that would make the business ineligible for an SBA loan.
The policy note, dated February 2, also reaffirms that “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.”
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The agency rescinds its previous exception that allowed a borrower to have up to 5 percent of ownership held by foreign nations, U.S. citizens, U.S. nationals, or green card holders whose principal residence was outside of the U.S.
SBA spokesperson Maggie Clemmons said in an emailed statement obtained by the AP, “The Trump SBA is committed to driving economic growth and job creation for American citizens – which is why, effective March 1, the agency will no longer guarantee loans for small businesses owned by foreign nationals."
In a late September press release, SBA announced it closed its 2025 fiscal year “with the most capital ever delivered to small businesses,” noting the majority of the small business loans were approved after Trump took office. The agency said it guaranteed 84,400 7(a) and 504 small business loans for $44.8 billion.
Last March, the SBA sharply reduced its workforce by 43 percent.
What People Are Saying
Small Business Majority CEO John Arensmeyer told the AP: “The latest decision by SBA fails to recognize that immigrants are twice as likely to start a business as native-born U.S. citizens. Given that reality, SBA’s severe restrictions will have a negative impact on small business creation throughout this country for years to come.”
SBA spokesperson Maggie Clemmons in an emailed statement obtained by the AP: “Across every program, the SBA is ensuring that every taxpayer dollar entrusted to this agency goes to support U.S. job creators and innovators.”
SBA Administrator Kelly Loeffler said in a September 30 press release: “Thanks to President Trump’s leadership, small business investment and confidence is soaring – and Main Streets across the country are making an unprecedented comeback. With record loan volume, both borrowers and lenders are sending a clear signal that America First means America is growing again. Our revitalized SBA is meeting the mission, and new highs in small business optimism are a direct result of this Administration’s historic tax relief, fair-trade policies, and massive deregulation. The data is clear: the Trump agenda is powering the confidence – and the capital - to start hiring, investing, and growing again.”
What Happens Next
The new policy will go into effect on March 1.
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