The Small Business Administration has implemented unprecedented restrictions on loan eligibility, excluding legal permanent residents from accessing SBA-backed funding for the first time in the agency’s 72-year history. Green card holders are now ineligible for SBA loans under new policy changes announced in February and implemented under Administrator Kelly Loeffler’s leadership as part of the Trump administration’s “America First” agenda.
The policy shift marks a dramatic departure from decades of SBA practice. Previously, businesses with at least 51% ownership by US citizens or legal residents could qualify for SBA-backed loans, but the new rules require 100% citizen ownership to receive funding.
Impact on Small Business Loan Access for Immigrant Entrepreneurs
The changes have left many business owners and industry professionals concerned about reduced access to capital. Aneesa Waheed, a naturalized citizen who operates five Tara Kitchen locations across New York and New Jersey and was named SBA’s New York state small business person of the year in 2024, expressed shock at the policy shift. “You think of the SBA as a source of support and strength for small businesses,” Waheed said, according to reports.
The SBA was created in 1953 to support small businesses primarily through loan programs. The agency typically underwrites portions of loans issued by banks and credit unions rather than providing direct loans to business owners.
Understanding SBA Loan Programs and Eligibility Changes
According to the agency’s own data, the SBA distributed over $44 billion in loans to small businesses during fiscal year 2025. The agency classifies businesses with 500 or fewer employees as small businesses, with loan amounts ranging from $50,000 to $5 million. These loans typically fund main street enterprises including retail shops, restaurants, and franchises, as well as business-to-business services in sectors like manufacturing and transportation.
However, under Loeffler’s leadership, the agency has embraced a more restrictive approach aligned with Trump’s economic policies. In June, Loeffler announced the citizenship requirement changes, and the administrator also declared that SBA regional offices would relocate from sanctuary cities opposing Trump’s immigration policies.
Administrator Loeffler’s Background and Policy Direction
Kelly Loeffler, a billionaire and Trump loyalist appointed in February 2025, previously served as Georgia’s interim US senator for one year before losing to Democrat Raphael Warnock in 2022. She faced insider trading accusations at the pandemic’s onset but was exonerated by the Department of Justice in May 2020.
Additionally, Loeffler and her husband Jeffrey Sprecher, CEO of Intercontinental Exchange and former chair of the New York Stock Exchange, have contributed $13.5 million to Trump’s campaigns and related Super PACs since 2020, according to reports. In a February op-ed posted on the SBA’s website, Loeffler stated that “Trump has restored confidence and opportunity to Main Street with a commonsense economic agenda designed to put hardworking families and small businesses in the driver’s seat.”
Industry Response and Alternative Funding Challenges
Professionals who help entrepreneurs secure financing have raised concerns about the policy’s practical implications. Keegan McBride, co-founder of SBA Source, a company specializing in SBA loans for the franchise sector, noted that many franchisees are immigrants, including both green card holders and naturalized citizens. “SBA loans are really only meant to be issued in situations where folks wouldn’t be able to get access to credit on similar terms without the government guarantee,” McBride explained.
Meanwhile, the new restrictions create significant obstacles even for married couples seeking to launch businesses together if both partners are not US citizens. Alternative non-SBA loans can be substantially more difficult to obtain, according to industry experts. “For most people, you’re not going to be able to get an unsecured line of credit, or at least not a sizable one,” McBride said, noting that borrowers typically need home equity, investment portfolios, or other collateral to secure alternative financing.
Long-Term Consequences for Permanent Residents
The policy creates particularly challenging circumstances for lawful permanent residents, who must wait at least five years before becoming eligible for US citizenship, with an additional year for processing. Some immigrants choose to maintain permanent resident status because their home countries prohibit dual citizenship, potentially creating permanent barriers to SBA loan access under the new requirements.
Aissatou Barry-Fall, CEO of the Lower East Side People’s Federal Credit Union, a nonprofit SBA lender in New York City, characterized the policy as discriminatory. “I think it’s discrimination,” Barry-Fall said, adding that the new requirements make “no sense whatsoever.”
In contrast, SBA spokesperson Maggie Clemmons defended the policy in a statement, saying the agency is “committed to driving economic growth and job creation for American citizens” and ensuring taxpayer dollars support “US job creators and innovators.” Waheed argued that excluding green card holders from these loans will likely harm communities, noting that successful businesses create employment, generate tax revenue, and strengthen neighborhoods. “Somebody who’s here on a green card, they’ve made a commitment to this country,” Waheed said.
The full economic impact of these Small Business Administration policy changes remains uncertain as affected entrepreneurs and lending institutions continue adjusting to the new eligibility requirements. No timeline has been announced for any potential policy review or modification.