- A new SBA rule bars green card holders from applying for SBA loans starting March 1
- SBA loans will be limited to businesses fully owned by US citizens or nationals
- The rule rescinds prior guidance allowing up to 5% ownership by foreign nationals or LPRs
A new rule by President Donald Trump's administration will bar green card holders from applying for U.S. Small Business Administration loans and limit SBA loan eligibility to citizen-owned businesses, an SBA notice showed.
The SBA is the U.S. government agency that provides loans and help to millions of small businesses across America. Legal permanent U.S. residents, or green card holders, are authorized to live and work permanently in the United States.
The Trump administration's policies towards immigrants have been condemned by human rights groups who say the government's actions like visa and green card revocations, attempted deportations and deployment of federal agents have made the environment fearful for minorities. Trump has cited domestic security concerns and fraud prevention aims to justify his policies that have faced legal challenges.
The SBA notice says starting March 1, businesses seeking loans backed by the SBA should be completely owned by U.S. citizens or U.S. nationals whose principal residence is in the United States.
Democratic U.S. Representative Grace Meng said the SBA's decision amounted to denying "hard-working legal immigrants the capital they need to start or grow a business" and will lock them "out of the American Dream."
The notice rescinds a previous guidance, "removing the narrow exception that allowed a Borrower to have up to 5% ownership held by foreign nationals, or U.S. Citizens, U.S. Nationals, or Legal Permanent Residents (LPRs) whose Principal Residents was outside of the United States, its territories or possessions."
"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," the notice added.
The new rule does not prohibit non-citizens in the U.S. from owning businesses or from accessing conventional bank loans.
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