The US Small Business Administration (SBA) has revised a previously announced small business ownership clause related to business owned by non-US citizens. The US government agency helping “Americans start, build and grow businesses” doubled down on US President Donald Trump’s ‘America First’ agenda by publishing a fresh policy notice on Monday, Feb 2 (US time).
The US Small Business Administration (SBA) has introduced a sweeping policy change that is set to take a big toll on green card holders hoping to get loans for their businesses. The US government agency helping “Americans start, build and grow businesses” doubled down on US President Donald Trump’s ‘America First’ agenda by publishing a fresh policy notice on Monday, Feb 2 (US time).
SBA’s revision of Standard Operating Procedure (“SOP”) 50 10 8 Lender and Development Company Loan Programs guidance related to businesses owned by non-US citizens is set to go into effect on March 1, 2026.
Immigrants from India will inevitably be among the most affected diaspora communities in the US, as the South Asian country continues to be the source of the largest number of migrants worldwide owing to its vast population.
Latest SBA policy change to hit green card holders
“SBA is requiring that 100% of 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 United States, its territories, or possessions,” stated US SBA Administrator Kelly Loeffler in the new policy notice.
The guidance revision comes at a time when the Trump administration is taking pride in its immigration crackdown and massive deportation campaign in the US. With this sweeping blow, the new notice has rescinded the previous Procedural Notice 5000-872050 Update to SOP 50 10 8 detailing citizenship and residency requirements for applicants.
As per the now-rebuffed December 2025 notice’s narrow exception, a borrower was allowed to have up to 5% ownership by foreign nationals, US citizens, US nationals or Legal Permanent Residents (LPRs) whose “principal Residence is outside of the United States, its territories, or possessions, as well as by Aliens with Conditional LPR status.” Nonetheless, Chinese nationals were specifically barred from the 5% foreign national ownership even at the time.
On the contrary, the notice published this week states, “Further, and
beginning with the Effective Date of this Notice, Legal Permanent Residents (LPRs) will not be eligible to own any percentage interest in an Applicant/Borrower, OC, or EPC.”
As highlighted in the notice, Loeffler’s announcement is consistent with 13 C.F.R. 120.100, i.e. the Code of Federal Regulations’ basic eligibility requirement for SBA business loan applicants and Executive Order 14159 the Executive Order 14159 aka “Protecting the American People Against Invasion.”
According to CFR’s Title 13 requirements, a small business applicant must:
- “Be an operating business (except for loans to Eligible Passive Companies);
- “Be organized for profit;
- “Be located in the United States;
- “Be small under the size requirements of part 121 of this chapter (including affiliates). See subpart H of this part for the size standards of part 121 of this chapter which apply only to 504 loans; and
- “Be able to demonstrate a need for the desired credit.”
Officials react to ‘anti-immigrant entrepreneurship’ decision
Frank Gallegos, the executive director of Cen Cal Business Finance Group, was shocked to see the policy change, The Business Journal reported. As per The Business Journal’s SBA Lenders list published in 2025, the company approved $18.6 million in SBA loans from October 1, 2023, to September 30, 2024.
Nonprofit development company Cen Cal partners with lenders to provide SBA 504 loans. Gallegos even estimated that around 10% of the company’s loans include LPR ownership. He further highlighted that the new policy change revoking the ownership clause will force borrowers to transfer ownership to US citizens or seek other financing options.
“This past year has been the opposite direction,” he told The Business Journal. “These people legally immigrate, they come here, they’re living the American dream.”
Democratic Party’s members also condemned the revision. Senate Small Business Committee Ranking Member Edward Markey and House Small Business Committee Ranking Member Nydia Velázquez described the policy reversal as an attack on immigrant entrepreneurship.
Data about Indian business ownership in US
According to US Citizenship and Immigration Services data, India was the second-largest country of origin for immigrants who obtained a green card in FY 2024.
“Among the top five countries of birth for people naturalising in FY 2024, Mexico was the lead country with 13.1% of all naturalisations, followed by India (6.1%), the Philippines (5.0%), the Dominican Republic (4.9%), and Vietnam (4.1%),” the USCIS report added.
Four in 10 small business owners are foreign-born, as per the US Chamber of Commerce’s data updated in June 2025.
A majority of hotel properties in the US are owned and operated by Indian-origin entrepreneurs.
“Nearly 60% of hotels in the US are owned by people of Indian origin. They are the single biggest force in America’s hotel industry, and also in the Canadian hotel industry. The largest proportion of owners for us and our large competitors are people of Indian origin in North America,” Elie Maalouf, IHG Hotels & Resorts CEO, told the Times of India in 2024.
Moreover, a 2022 report by the National Foundation for American Policy establishes that Indian American-owned businesses generate over $150 billion in annual revenue and employ more than 800,000 workers nationwide.