How I view the SBA 100% rule and its impact on immigrant founders
- Ali Barkhordar
- Jun 5
- 2 min read
How I view the SBA 100% rule and its impact on immigrant founders
I have watched the small business capital landscape shift dramatically for immigrant entrepreneurs. Under Policy Notice 5000-876441, effective March 1, 2026, a business must be entirely owned by U.S. citizens or nationals to qualify for specific federal financing. This new SBA 100% rule excludes lawful permanent residents from these programs, and I want to break down exactly what this means for the market.
My take on the SBA 100% rule policy details
I have noted that the brief 5% carve-out from late 2025 has been rescinded. Even a 1% stake held by a green card holder disqualifies the entire business under the SBA 100% rule. I see this as the fourth change in a single year. The March 2025 version still allowed permanent residents, but the March 2026 update removed them entirely. I advise clients that existing loans keep their terms, but new applications, refinances that create a new loan, and ownership changes are subject to the new standard with a six-month lookback on prior owners.
Why I recommend non-bank funding under the SBA 100% rule
I always highlight that immigrant founders start businesses at roughly twice the rate of native-born citizens. Pulling federal backing from viable companies leaves a real capital hole. When traditional bank channels contract, I see non-bank liquidity stepping in. For mixed-ownership businesses and permanent residents shut out of bank leverage, I believe structured non-bank and revenue-based funding are the primary path. The SBA 100% rule accelerates this shift toward alternative finance, and I am here to help navigate it.
