SBA Restricts Loans to U.S. Citizens, Excluding Green Card Holders

The U.S. Small Business Administration has restricted eligibility for its loans to U.S. citizens and nationals only, excluding permanent legal residents with green cards and any businesses even partially owned by them. The policy took effect in March 2026 for direct SBA loans and expanded in April to include all SBA-backed financing, reshaping access to federal support for immigrant entrepreneurs nationwide, with California poised to feel the most significant effects.

The changes eliminate a key resource for immigrants starting or expanding ventures such as restaurants, nail salons, child care centers and manufacturing firms. SBA loans have long offered low-interest rates and accessibility for those without established credit histories, often backed by government guarantees to private lenders for higher-risk borrowers. In fiscal year 2025, the agency approved 3,358 such loans for businesses partly owned by lawful permanent residents, accounting for 4 percent of its total 85,000 approvals. Agency spokesperson Maggie Clemmons stated that the limited lending capacity necessitated the shift to prioritize funding for citizens who previously competed with noncitizens.