New SBA Ownership Requirements Starting March 1, 2026
The Small Business Administration (SBA) recently announced a policy change that will affect new SBA Loan applications starting March 1, 2026. Here’s what you need to know.
What’s Changing: Citizenship and Ownership Requirements
Previously, the SBA allowed up to 5% of a business to be owned by non-citizens, including Legal Permanent Residents (green card holders). Starting March 1, 2026, the SBA is implementing new ownership rules across their SBA 7(a) and 504 loan programs. Here is what you need to know.
SBA 7(a) Loans
What is a 7(a) loan? The 7(a) loan program is the SBA’s primary loan program, providing financing up to $5 million for a wide variety of business purposes including working capital, equipment purchases, real estate, and business acquisitions.
What’s changing on March 1st:
- 100% U.S. citizen ownership required
Businesses with any non-citizen ownership are not eligible for SBA 7(a) loans.
-
Green card holders no longer eligible as owners
Green card holders cannot own any part of a business applying for an SBA 7(a) loan. -
U.S. residency required
All owners must maintain their principal residence in the United States or its territories. -
Applies across all entities
Rules apply to the applicant business, operating companies, and any eligible passive companies.
SBA 504 Loans
What is a 504 loan? The 504 loan program provides long-term, fixed-rate financing for major fixed assets like real estate and equipment. These loans are issued through Certified Development Companies (CDCs) and are typically used for purchasing land, buildings, or long-term machinery.
What’s changing:
- 100% U.S. citizen ownership required
Businesses with any non-citizen ownership are not eligible for SBA 504 loans.
-
Green card holders no longer eligible as owners
Green card holders cannot own any part of a business applying for an SBA 504 loan. -
U.S. residency required
All owners must maintain their principal residence in the United States or its territories. -
Applies across all entities
Rules apply to the applicant business, operating companies, and any eligible passive companies.
Why It Matters
According to the SBA Office of Advocacy, immigrant entrepreneurs make up 18.5% of all businesses with employees and 24% of all non-employer firms in the United States. Limiting immigrant entrepreneurs from obtaining SBA loans is a significant barrier to a vital segment of our economy that drives innovation and job creation.
Timeline
- Now through February 28, 2026: Current policies remain in effect
- Loans funded before March 1, 2026: Not impacted by these changes
- March 1, 2026: New policies take effect
Quick Reference: Financing Eligibility After March 1st
| Loan Type | U.S. Citizen (100% Owner) | Green Card Holder |
| SBA 7(a) Loan | Eligible | Ineligible (Starting March 1, 2026) |
| SBA 504 Loan | Eligible | Ineligible (Starting March 1, 2026) |
| Alternative Financing | Eligible | Eligible (Available through Clear Skies Capital) |
How Clear Skies Capital Can Help
We are staying on top of these regulatory changes to ensure a smooth experience for our clients. Our team is:
- Reviewing all SBA guidance in detail
- Updating our systems and processes ahead of the deadline
- Available to answer your specific questions about how these changes may affect your business
Clear Skies Capital offers alternative financing solutions for business owners who are U.S. citizens or green card holders. While SBA 7(a) and 504 loans will now require 100% U.S. citizen ownership, our other financing products remain available to green card holders.
Have Questions?
Every business situation is unique. If you’re considering an SBA loan or have questions about how these updates might impact your plans, we’re here to help.
Call us: 1-800-230-9822
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