The Trump administration has introduced a new rule that restricts access to U.S. Small Business Administration (SBA) loans for green card holders. According to an SBA notice, businesses seeking loans backed by the agency must be entirely owned by U.S. citizens or U.S. nationals whose primary residence is within the United States, effective March 1. The SBA is the U.S. government agency that provides loans and support to millions of small businesses across America. Legal permanent U.S. residents, also known as green card holders, are authorised to live and work permanently in the United States.
The SBA notice rescinds previous guidance that allowed for a narrow exception, where up to 5% ownership could be held by foreign nationals, or U.S. citizens, U.S. nationals, or legal permanent residents whose principal residence was outside of the United States, its territories, or possessions. The new rule explicitly states that legal permanent residents will not be eligible to own any percentage interest in an applicant or borrower.
Democratic U.S. Representative Grace Meng criticised the decision, stating that it denies hard-working legal immigrants the capital needed to start or grow a business, effectively locking them out of the American Dream. The policy shift has been met with condemnation, with human rights groups expressing concern over the Trump administration’s policies towards immigrants, citing visa revocations, attempted deportations, and deployment of federal agents as creating a fearful environment for minorities.
It is important to note that the new rule does not prohibit non-citizens in the U.S. from owning businesses or from accessing conventional bank loans outside the SBA program.
