• Source:JND
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Green card holders will lose access to US Small Business Administration (SBA)–backed loans from March 2026 under revised eligibility rules, a move that could significantly affect immigrant entrepreneurs, including many Indians operating small businesses across the United States. 

According to an official SBA policy notice issued on February 2, 2026, the agency has revised its Standard Operating Procedure (SOP) 50 10 8 governing lender and development company loan programmes. The updated guidance will take effect on March 1, 2026, and applies to major SBA-backed loans commonly used by start-ups and small enterprises.

Under the new framework, 100 per cent of both direct and indirect ownership in a loan applicant must be held by US citizens or US nationals whose principal residence is in the United States or its territories. This marks a sharp departure from previous rules and effectively bars lawful permanent residents, or green card holders, from owning any stake in a business seeking SBA financing.

The SBA stated explicitly: “Legal Permanent Residents (LPRs) will not be eligible to own any percentage interest in an Applicant/Borrower, OC, or EPC.”

What Has Changed 

The revision nullifies an earlier procedural notice issued in December 2025, which allowed a limited exception. Under that now-revoked rule, up to 5 per cent ownership by foreign nationals or legal permanent residents was permitted in certain cases, provided their principal residence was outside the US. Even then, Chinese nationals were excluded from the exception.

The new policy removes all such allowances, requiring full US citizen or national ownership for SBA loan eligibility.

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Why The Change Matters

SBA-backed loans are a crucial source of financing for small businesses, particularly for first-time entrepreneurs who may struggle to access traditional bank credit. The new rule means that businesses partially or wholly owned by green card holders will no longer qualify for these loans once the policy comes into force.

This could affect thousands of immigrant-owned enterprises, including a substantial number run by Indian-origin entrepreneurs, who form one of the largest groups of green card holders and small business owners in the US. 

The policy change comes amid a broader push by the Trump administration to tighten immigration-related regulations and align federal programmes with stricter citizenship criteria. The agency clarified that the rule will apply only to new loan applications submitted from March 1, 2026. Businesses planning to seek SBA financing after that date may need to restructure ownership or explore alternative funding options. 

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