New SBA rules?

February 18, 2026

by an investor from McGill University in Virginia, USA

Curious about dealing with the new SBA rules that makes green-card business owners non-eligible (other than private equity route)?

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Reply by a lender
from Cornell University in Los Angeles, CA, USA

Hi ^redacted‌ - nice to meet you. The new SBA rule (Policy Notice###-###-#### goes into effect March 1, 2026. After that date, 100% of all direct and indirect owners of a business applying for an SBA loan must be U.S. citizens or U.S. nationals. Green card holders can't own any percentage, even 1%. This applies to both 7(a) and 504 loans. If you're mid-deal right now, the only path is getting your SBA loan number pulled before March 1. That requires a substantially complete file plus the G-845 verification back from USCIS, which can take 2 days to 3 weeks. Time is very tight. After March 1, here are your realistic options outside of private equity: Conventional bank loans. Banks and credit unions can still lend to green card holders. No SBA guarantee means higher down payments, shorter terms, and higher rates. But it's doable if you have strong credit and a solid business. Ownership restructuring. If you have a U.S. citizen spouse, partner, or co-buyer, you could transfer 100% ownership to them and still qualify for SBA financing. This gets complicated with taxes and legal structure though, so get an attorney involved. Naturalization. If you're eligible for U.S. citizenship, becoming a citizen restores full SBA eligibility. Worth exploring if you're close. Seller financing. Negotiate a larger seller note to reduce the amount you need from a bank. This can bridge the gap that SBA would have covered. Important: this rule does not stop green card holders from owning or operating a business. It only blocks access to SBA-guaranteed loans. The business opportunity itself isn't off limits, just the cheapest financing path.

Reply by a searcher
in Asheville, NC, USA

well very simple - US citizen = SBA lending - Not US citizen = no SBA lending. I just submitted a SBA application, they checked and make sure I was a US citizen. So it's most probably already in application for deal closing in the near future. My previous loan was made as a green card holder.

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