# Can a green card holder own a business that gets an SBA loan?

**Short answer:** No, not for 7(a) or 504 loans. Since March 1, 2026, lawful permanent residents may not own any percentage of the applicant (SBA Policy Notice 5000-876441). All direct and indirect owners must be U.S. citizens or U.S. nationals with a principal residence in the United States.

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Last checked: 2026-11-09

No. Since March 1, 2026, SBA's rule is that lawful permanent residents may not own any percentage of the applicant. SBA Policy Notice 5000-876441 made the change.

## The rule

100% of direct and indirect owners and SBA-required guarantors must be U.S. citizens or U.S. nationals. Each must have a principal residence in the United States, its territories or possessions (SOP 50 10 8.1, Sec. A, Ch. 1, Para. F). Appendix 3 defines an Ineligible Person to include permanent and conditional lawful permanent residents.

## Transition

Procedural Notice 5000-876626 applied the rule to delegated loans approved on or after March 1, 2026. It also applied to non-delegated applications entering R1 status in E-Tran on or after that date. Applications reaching R1 status by 11:59 PM Eastern on February 28, 2026 were still processed.

## Options if a green card holder is an owner

- The person can completely divest before the SBA loan number is issued.
- The person can naturalize. Naturalized citizens are eligible with no special restrictions. SBA looks back 6 months before the SBA loan number is issued, so ask your lender how it treats a recent naturalization.
- The person can give a limited guaranty in the cases the SOP allows, as a non-owner.

The rule applies to 7(a) and 504 loans. Existing loans have separate treatment in Information Notice 5000-877673.

## Sources

- [SBA Policy Notice 5000-876441 (effective March 1, 2026)](https://legacy.sba.gov/document/policy-notice-5000-876441-update-sop-50-10-8-citizenship-residency-requirements-recission-procedural-notice-5000-872050)
- [SOP 50 10 8.1, Sec. A, Ch. 1, Para. F (p. 28)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, Appendix 3, Ineligible Person (about p. 300)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SBA Procedural Notice 5000-876626 (effective March 1, 2026)](https://legacy.sba.gov/document/procedural-notice-5000-876626-revised-applicant-ownership-citizenship-residency-requirements-7a-504-loans)
- [SBA Information Notice 5000-877673, question 5 (March 31, 2026)](https://legacy.sba.gov/document/information-notice-5000-877673-guidance-frequently-asked-questions-related-recent-sba-procedural-notices)