SBA green card rule timeline: what changed and when, 2025–2026
By Juwon Lee, Principal · Published · Last checked September 29, 2026
Short answer: green card holders could own SBA 7(a) and 504 borrowers until the end of February 2026. SBA removed them in two February 2026 notices, effective March 1, 2026, and applied the same rule to Microloans from April 1, 2026. SOP 50 10 8.1, effective October 1, 2026, is a new edition of the rulebook that keeps the requirement; it is not a new start date.
Timeline
This timeline covers the SBA notices on owner citizenship for 7(a), 504, and Microloans. It does not cover other SBA programs.
Executive Order 14159 published
"Protecting the American People Against Invasion" appears in the Federal Register (90 Fed. Reg. 8443). SBA later cites it as a basis for its 2026 notices.
Policy Notice 5000-865754 — 100% ownership by citizens, nationals, or green card holders
Citing Executive Order 14159, SBA limits 7(a) and 504 financing to businesses with 100% beneficial ownership by U.S. citizens, U.S. nationals, or lawful permanent residents. Foreign nationals, asylees, refugees, visa holders, DACA recipients, and people in the U.S. illegally are ineligible, and lenders must document at least 81% of beneficial owners at application.
Source: SBA Policy Notice 5000-865754
SOP 50 10 8 takes effect — green card holders still eligible
SBA financing is limited to businesses whose owners and required guarantors are U.S. citizens, U.S. nationals, or lawful permanent residents, with a primary residence in the United States. Visa holders, asylees, refugees, DACA recipients, foreign nationals, and people in the U.S. illegally are ineligible.
Procedural Notice 5000-872050 — a 5% exception
The general rule stays the same, but up to 5% of ownership in total may be held by foreign nationals living outside the U.S., by U.S. citizens, nationals, or permanent residents living abroad, and by conditional permanent residents. Applies to applications SBA approves on or after January 1, 2026.
Source: As described in GAO decision B-338157; SBA Procedural Notice 5000-872050
Policy Notice 5000-876441 — permanent residents removed
Rescinds the 5% exception. Effective March 1, 2026, 100% of direct and indirect owners must be U.S. citizens or U.S. nationals with a principal residence in the United States, and lawful permanent residents may not own any percentage.
Source: SBA Policy Notice 5000-876441
Procedural Notice 5000-876626 — the rulebook text and the cutoff
Writes the requirement into SOP 50 10 8 and adds permanent residents to the list of Ineligible Persons. It applies to delegated loans issued an SBA loan number on or after March 1, 2026, and to non-delegated applications that reach R1 status in E-Tran on or after March 1. Applications with permanent-resident ownership that reached R1 status by 11:59 p.m. Eastern on February 28, 2026 would still be processed.
The 7(a) and 504 requirement takes effect
Only applications from businesses 100% owned by U.S. citizens or U.S. nationals are eligible.
Policy Notice 5000-877232 — Microloans
The SBA Microloan program adopts the same 100% U.S. citizen or U.S. national ownership requirement, effective April 1, 2026.
Source: SBA Policy Notice 5000-877232
Information Notice 5000-877673 — SBA answers lender questions
A non-owner who is ineligible (except someone in the U.S. illegally) may give a limited or supplemental guaranty; an ineligible owner may completely divest before the SBA loan number is issued; naturalized dual citizens are eligible, with extra documentation for some countries; loans approved before March 1 may be serviced but not increased.
Microloan requirement takes effect
SBA Microloans require 100% ownership by U.S. citizens or U.S. nationals.
Source: SBA Policy Notice 5000-877232
GAO decision B-338157
GAO concludes the two February 2026 notices are a "rule" under the Congressional Review Act and are subject to its requirement that rules be submitted to Congress before taking effect. GAO notes that SBA did not submit a CRA report.
Source: GAO decision B-338157
S.J.Res.202 introduced
A Senate joint resolution disapproving the two notices is introduced and referred to the Committee on Small Business and Entrepreneurship. As of the last check, no further action is recorded.
Source: congress.gov
SOP 50 10 8.1 published
A new edition of SBA’s lender rulebook, effective October 1, 2026, carrying the same citizenship and residency requirement.
SOP 50 10 8.1 with Technical Policy Updates published
Supersedes the August version before it takes effect. It applies to applications received by SBA on or after October 1, 2026; SOP 50 10 8 continues to govern applications submitted through September 30, 2026. The citizenship and residency requirement is unchanged.
SOP 50 10 8.1 takes effect
A new rulebook edition, not a new start date: the ownership requirement has applied to 7(a) and 504 loans since March 1, 2026.
Source: SOP 50 10 8.1
If you applied before March 1, 2026
Under Procedural Notice 5000-876626, the deciding date depends on how the loan was processed. A delegated loan was covered if its SBA loan number was issued on or after March 1, 2026. A non-delegated application was covered if it reached R1 status in SBA’s E-Tran system on or after March 1; one with permanent-resident ownership that reached R1 status by 11:59 p.m. Eastern on February 28, 2026 would still be processed. Your lender can tell you which applied to your file.
If you already have an SBA loan
For loans approved before March 1, 2026, lenders may continue servicing. They may not increase a loan if the business does not meet the current requirement, and any new owner or new SBA-required guarantor must meet it. (SBA Information Notice 5000-877673, Questions 5–6.)
What to watch
GAO’s July 1, 2026 decision addressed whether the notices are a rule that had to be submitted to Congress. S.J.Res.202 remains in committee as of September 29, 2026. The notices remain in effect, and SOP 50 10 8.1 carries the same requirement. This page will be updated when SBA publishes a new notice or Congress acts.
Related guides
- Can a U.S. citizen co-owner make the business SBA-eligible?
- Turned down for an SBA loan because an owner has a green card: what to do next
Maplestead Finance Partners arranges business financing through lenders; it does not lend and is not affiliated with the SBA. This page is general information, not legal advice. Confirm your situation with your lender or attorney.