BY SPEAKIN’ OUT NEWS
Thousands of legal permanent residents who own businesses in the United States may face new challenges obtaining financing after a recent policy change by the U.S. Small Business Administration (SBA).
Under a rule implemented in March 2026, businesses seeking SBA-backed loans must now be fully owned by U.S. citizens or U.S. nationals. The change eliminates eligibility for lawful permanent residents, commonly known as green card holders, who were previously allowed to apply for federal small-business loans.
The policy affects the SBA’s popular 7(a) and 504 loan programs, which many entrepreneurs use to start businesses, purchase equipment, buy property, or expand operations. Under the revised rule, a business may be disqualified if it is partially owned by a noncitizen who is not a U.S. national.
The SBA said the policy is intended to ensure federal lending programs prioritize U.S. citizens. However, immigration advocates and business groups warn that the change could limit opportunities for entrepreneurs who are legally authorized to live and work in the United States.
Critics argue that many immigrant-owned businesses have long contributed to local economies, created jobs, and generated tax revenue. They say restricting access to SBA-backed loans could make it more difficult for business owners to obtain affordable financing, especially during a company’s early stages.
In announcing the policy, the SBA referred to permanent residents as “foreign nationals,” a characterization that drew criticism from some advocacy groups.
Entrepreneur Sayuri Tsuchitani, who used an SBA-supported pandemic relief program to launch a Japanese head spa business, expressed concern about the impact of the new rule.
“The SBA led me to my success of the American dream,” Tsuchitani told NPR.
While legal permanent residents can still own businesses and seek private financing, SBA-backed loans are often considered more accessible because they carry federal guarantees and favorable lending terms.
Supporters and critics alike say the policy could have lasting effects on small-business growth and entrepreneurship across the country.