New Trump administration rule will bar green-card holders from applying for SBA loans

A new Trump administration rule limits Small Business Administration loans to U.S. citizens, barring green card holders from applying.

The new rule, which goes into effect March 1, surprised many lenders because it reversed decades of government lending policies that sought to broaden its small business reach as a way to stoke job creation.

Bankers estimate that two-thirds of new jobs each year are created by small companies, and the immigrant community often has the highest rates of entrepreneurship among any group in the nation.

“The Trump SBA is committed to driving economic growth and job creation for American citizens – which is why, effective March 1, the agency will no longer guarantee loans for small businesses owned by foreign nationals,“ the agency said in a statement. ”Across every program, the SBA is ensuring that every taxpayer dollar entrusted to this agency goes to support U.S. job creators and innovators.”

It is not yet known exactly how the rule change could affect future immigrant small businesses in Minnesota. The SBA does not release figures based on grantees’ citizenship.

But lenders estimate that nationally 5% to 15% of their SBA loan portfolios involve green card holders, who are designated as legal permanent residents.

Sunrise Bank in St. Paul, for example, only has a handful of new customers each year who are green-card holders.

Moua believes the move is short-sighted.

“You have many longtime legal permanent residents who own businesses and have been living in the States, whether it be here in Minnesota or nationally, and have been every much as American as everyone else,” he said.

The new rule specifically says only citizens or U.S. nationals can apply for SBA loans after March 1. Until now, green-card holders, who also are called lawful permanent residents (LPR), were eligible.

Most SBA loans are handled by community bank lenders and financial nonprofits that have a stated mission to serve small enterprises that often have a tougher time securing loans from large banks.

In 2025, more than $33.8 billion in SBA-backed loans were made. Of that, $936 million in loans and guarantees were made in Minnesota.

The Metropolitan Economic Development Association (MEDA) is one such SBA lender that regularly helps people of color and immigrant entrepreneurs.

“A significant amount of our clients are legal immigrant entrepreneurs who own businesses, and are co-owners of businesses with U.S. citizens,” said Adrian Ruddock, MEDA’s loan vice president. “These companies contribute million of dollars [to] Minnesota’s economy, and create thousands of family-sustaining jobs each year. The recent SBA policy change adds another barrier for these entrepreneurs to get access to capital at fair and reasonable rates.”

The SBA loan guarantees allow banks to grant small businesses the capital needed to buy equipment, supplies, inventory, furniture and real estate.

“The policy notice came as a surprise to many lenders as [legal permanent residents] have historically been eligible to receive SBA financing,” said Michael Zidansek, an attorney with Starfield Smith, in a letter to clients. “The number of potential loans affected by the policy shift will be substantial as there are approximately 14 million LPRs in the United States.”

Amplio Economic Development Corp. in Arden Hills makes SBA loans and has a portfolio of 400 loans worth $200 million, made mostly to U.S. citizens.

Amplio will soon take to social media, he said, to let people know that another SBA-like lending program it administers would not be affected.

Bankers said there are lobbying efforts underway to try to secure some state funding to replace several cuts at the federal level, including this one.

City and state officials insist immigrant businesses are in need of help after seeing steeply declining sales as the federal crackdown ramped up since December. The city of Minneapolis said federal agents’ presence has cost small businesses $10 million to $20 million a week as both customers and workers are afraid to leave their homes.

The Lake Street Council said shops along the corridor, which is heavily populated with immigrant-operated businesses, have lost $46 million in December and January because of the immigration crackdown.