Small Business Administration Bars Noncitizens From Loans

Starting March 1, the Small Business Administration (SBA) is banning green card holders and other non-U.S. citizens from applying for loans from the agency’s main lending 7(a) program. SBA will require that 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 U. S. or its territories.

SBA rescinded a previous SBA notice released in December, which stated up to 5% of a small business could be owned by foreign nationals or legal permanent residents and still legally qualify for a loan.

CBS News reported the SBZ said the new rules align with President Trump’s January 2025 executive order, called the “Protecting the American People Against Invasion,” that the White House said at the time was aimed at enforcing U.S. immigration laws and ensuring public safety.

The 7(a) program provides loan guarantees to lenders serving small businesses. The loan program allows business owners to borrow up to US$5 million to use as working capital, refinance debt, purchase equipment, and buy or upgrade real estate and buildings, among other purposes. 

Small Business & Entrepreneurship Committee Ranking Member Edward J. Markey (Democrat-Massachusetts) and House Small Business Committee Ranking Member Nydia Velázquez (D-New York-7) condemned the actions of the SBA after it announced that small businesses with legal permanent residents will be barred from receiving SBA loans.

“The Trump administration is stoking the flames of hatred, spreading fear and confusion among immigrants and small business owners,” Markey and Velázquez said in a statement. “Rather than support hard-working legal immigrants to start or expand a business, the Trump SBA is choosing hatred by barring green card holders from receiving an SBA loan. The Administration’s message to immigrants is clear: you are not welcome to pursue the American Dream.” 

As CMM previously reported, over 34.7 million small businesses in America account for more than 99.9% of all businesses and employ 45.9% of American workers, or about 59 million people.

Additionally, as CMM previously reported Latinos start more businesses per capita than any other U.S. racial or ethnic group. In 2023, they created 36% of new businesses in the states—nearly double their representation in the overall population. It is estimated that Latino-owned businesses could surmount $1.2 trillion in revenue, creating 5 million to 6 million jobs in the coming decades.