US Small Business Administration bars green card holders from loans
Change
The US Small Business Administration barred lawful permanent residents (green card holders) from receiving SBA-backed loans for the first time in the agency's history.
Why it matters
Government-guaranteed credit channels that many 'main street' enterprises and franchisees rely on will be removed as a financing option for non-citizen owners, tightening access to capital where private credit is often unavailable. Joint ventures and married couples with a non-citizen co-owner will face new eligibility hurdles that complicate ownership structures and deal completion.
Implications
- • SBA-approved lending institutions' underwriting and compliance teams must update eligibility verification and loan-processing systems to reject applications from lawful permanent residents.
- • Franchise owners and prospective franchise buyers with green card-holder co-owners must restructure ownership to be fully citizen-owned or secure alternative non-SBA financing before completing transactions.
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Source
Topics
Policy & Regulation Regulatory Actions Compliance Banking Regulation Financial Services