SBA Blocks Green Card Holders From Key Loan Program, Raising Concerns for Immigrant Businesses

A new policy shift by the U.S. Small Business Administration (SBA) is sending shockwaves through immigrant business communities across the country. Beginning March 1, green card holders and other non-U.S. citizens will no longer be eligible for the agency’s flagship 7(a) loan program — a move critics say could disproportionately impact immigrant entrepreneurs.

SBA Administrator Kelly Loeffler announced the change as part of what she described as a renewed commitment to an “America First” lending approach. The 7(a) program, one of the government’s most widely used small-business financing tools, provides critical capital for startups, franchise owners, and expanding enterprises. For many immigrant entrepreneurs, it has long served as a financial lifeline.

The rule change means that lawful permanent residents — despite living, working and paying taxes in the United States — will be excluded from accessing federally backed small-business loans. Industry observers warn that the decision could ripple across sectors heavily populated by immigrant operators, including hospitality, retail, food service and logistics.

Advocacy groups argue that immigrant-founded businesses are not marginal players in the U.S. economy. According to multiple economic studies, immigrants start businesses at higher rates than native-born citizens and collectively employ millions of workers nationwide. Restricting access to capital, critics say, risks slowing economic dynamism at a time when entrepreneurship remains a core growth engine.

Supporters of the policy contend that limited federal resources should prioritize U.S. citizens and argue the shift aligns with broader immigration and economic policy objectives. Yet small-business lenders warn that the exclusion could also reduce overall loan demand and shrink deal flow in communities where immigrant entrepreneurship drives local economic activity.

In practical terms, many permanent residents who were in the process of applying for SBA-backed financing may now need to turn to private lenders, where interest rates are often higher and approval criteria stricter. That could widen funding gaps for first-time entrepreneurs and family-run businesses.

The long-term implications remain uncertain. But as the March 1 deadline approaches, immigrant business owners are scrambling to reassess growth plans, expansion strategies and financing options in a landscape that has suddenly grown more restrictive.

This announcement has led to sharp criticism from leaders in the hospitality sector, who warn it could severely disrupt immigrant-owned hotels and family-run lodging businesses.

Former chairs of the Asian American Hotel Owners Association (AAHOA), Mukesh “Mike” Patel and Bharat Patel, have voiced concern that the SBA’s decision could undermine decades of immigrant-driven investment in the U.S. hospitality industry. Immigrant entrepreneurs — particularly within South Asian communities — own a significant share of independent and franchise hotels across the country.

The SBA’s 7(a) loan program has long served as a cornerstone of hotel acquisition, renovation and expansion financing. Because hospitality businesses often require substantial upfront capital — from property purchases to operational upgrades — access to government-backed loans has been critical for small and mid-sized operators.