SBA Policy Change Affecting Green Card Holders and Small Businesses
Beginning March 1, the U.S. Small Business Administration (SBA) will prohibit businesses with any legal permanent resident ownership from qualifying for SBA-backed loans. Under the new policy, 100 percent of all direct and indirect owners of a loan applicant must be U.S. citizens or U.S. nationals residing in the United States or its territories. This represents a significant reversal of longstanding SBA eligibility rules and directly affects immigrant-founded and immigrant-owned businesses nationwide.
The policy applies to the SBA’s primary loan programs, including 7(a) loans used for working capital and equipment, as well as 504 loans used for commercial real estate and heavy equipment purchases. Any business with green card holder ownership that has not received an SBA loan number prior to March 1 will be ineligible under the new rules.
What Changed Under the New SBA Guidance
Previously, lawful permanent residents were eligible to own and operate businesses that qualified for SBA financing. In recent months, the SBA briefly allowed limited foreign national ownership before fully reversing course. Under the new guidance:
• Legal permanent residents may not own any percentage of a business seeking an SBA-backed loan
• The rule applies to borrowers, operating companies, and eligible passive companies
• Both direct and indirect ownership interests are included
• Existing applications must receive an SBA loan number before March 1 to remain eligible
This policy shift has significant implications for immigrant entrepreneurs, family-owned businesses, and companies with mixed ownership structures.
Why This Matters for Immigrant Entrepreneurs and Employers
Immigrant-founded businesses play a substantial role in the U.S. economy, creating jobs, revitalizing communities, and driving innovation. SBA-backed loans have historically been a critical source of affordable financing for these businesses. By excluding green card holders from ownership eligibility, the new policy limits access to capital for businesses that otherwise operate lawfully and contribute to local and national economies.
Lenders and economic development organizations have raised concerns that affected businesses may be forced to seek alternative financing options with higher interest rates, larger down payment requirements, or less favorable terms. Others may attempt to restructure ownership, often on short notice, which can create legal, tax, and operational complications.
Intersection of Immigration Status and Business Ownership
This policy highlights the growing intersection between immigration status and business operations. While green card holders are authorized to live and work permanently in the United States, federal agencies may impose additional restrictions in specific regulatory contexts, such as government-backed lending programs.
For business owners, immigration status now directly affects access to capital, ownership structure, and long-term planning. These developments underscore the importance of aligning immigration strategy with business and financial planning.
What Business Owners Can Do Now
Business owners affected by this change should act quickly to assess their options. Potential considerations may include:
• Reviewing current ownership structures and eligibility timelines
• Exploring non-SBA financing alternatives
• Evaluating long-term immigration strategies for key owners or founders
• Coordinating legal, financial, and tax advice before restructuring ownership
Authoritative information on SBA loan programs is available at https://www.sba.gov. Immigration-related guidance can be found through U.S. Citizenship and Immigration Services at https://www.uscis.gov.
Our Perspective at Wilner & O’Reilly
Wilner & O’Reilly regularly advises business owners, executives, and entrepreneurs on how immigration status affects business operations, ownership, and long-term strategy. As federal agencies continue to adjust eligibility rules that intersect with immigration law, proactive planning is essential.
Our role is to help clients understand how immigration classifications, permanent residence, and future citizenship options may impact their ability to own, operate, and finance U.S. businesses, and to coordinate immigration strategy with broader business goals.
Speak With an Immigration Attorney About Business Ownership and Immigration Strategy
If you are a green card holder, immigrant entrepreneur, or business owner impacted by the new SBA policy, experienced immigration guidance can help you evaluate next steps. Contact Wilner & O’Reilly to discuss your situation and long-term strategy at https://www.wilneroreilly.com/contact/. For additional insights on immigration developments affecting businesses, visit the Wilner & O’Reilly Immigration Blog at https://www.wilneroreilly.com/blog.
FAQ: SBA Loans, Green Card Holders, and Immigration Status
Can green card holders own U.S. businesses?
Yes. Lawful permanent residents may own and operate U.S. businesses, but specific federal programs like SBA loans may impose additional eligibility restrictions.
Are green card holders completely barred from SBA loans?
Under the new policy effective March 1, businesses with any green card holder ownership are ineligible for SBA-backed loans.
Does this rule apply to both 7(a) and 504 loans?
Yes. The policy applies to SBA 7(a) loans and is expected to apply to SBA 504 loan programs as well.
What if my SBA loan was approved before March 1?
Loans that receive an SBA loan number before March 1 are expected to remain eligible under prior rules.
Can ownership be transferred to a U.S. citizen family member?
Some businesses may consider restructuring ownership, but this can raise legal, tax, and operational issues that should be carefully evaluated.
Does immigration status affect access to other government programs?
In some cases, yes. Immigration status can affect eligibility for certain federal, state, or local programs.
Should immigrant business owners be concerned about future policy changes?
Yes. Recent developments suggest increased scrutiny of immigration status across multiple regulatory areas, making long-term planning important.
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