Legal Permanent Residents are no longer SBA Eligible

lender profile

February 02, 2026

by a lender in Falmouth, MA, USA

Starting March 1, 2026, the SBA is making a major change to ownership rules for small business applicants. Under the revised SOP###-###-#### , 100% of all direct and indirect owners must be U.S. Citizens or U.S. Nationals with their Principal Residence in the U.S., its territories, or possessions. What does this mean? Legal Permanent Residents (LPRs) will no longer be eligible to own any percentage of an SBA applicant business. This is a huge shift for the M&A space. It changes who can buy businesses and who brokers can sell to. This impacts solely the demand side for business buying. While transaction volume isn’t expected to change, the number of buyers actively looking to buy will. How will this affect valuations? That’s something we’ll have to watch and learn. What are your thoughts on this?
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Reply by a lender
from California State University, Sacramento in Seattle, WA, USA
I'm so sorry to say that as an almost 40 year SBA lender, I'm so upset and saddened by this rule change. I wish I had helpful comments. As of this morning, give us a chance to get back with more. This country is meant for everyone. And we're stronger when more people get to participate and contribute. Inclusivity is a super power. I'll be on the emergency Search Fund Coalition on Friday so join us for a round table/office hours style session.
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Reply by a searcher
in New York, NY, USA
This is a big blow not only for the Searcher / ETA community but Main Street entrepreneurs all around the US. If anyone wants to discuss nonSBA financing options we’re happy to help facilitate. 🙏
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