Can an Indian get a business loan in the USA?

18 Sep 2020

Yes, why not. There are resources for immigrants to find small business loans in the United States. Green card holders, also known as legal permanent residents, can consider business loans through Small Business Administrations (SBA) Community Advantage loan program. If the borrower is not a green card holder or legal permanent resident, he can face extra challenges.

SBA community loan advantage

An SBA loan is a federally guaranteed small business term loan, ranging from $50,000 to $250,000 with interest rate typically ranging 7% to 9% for 7 to 10 years.

The SBA loan for non-US citizens

The SBA states that businesses that are 51% owned and controlled by non-US citizens provided they are lawfully in the United States qualify for SBA financing options. However, it is the discretion of a lender whether he wants to offer loan to a non-US citizen or not. Each director, proprietor, partner, 20% + owner of a business looking for an SBA loan must submit an SBA Form 912 to the lender as a part of the loan application process.

If your lender is willing to offer you a loan, you have to follow SBA rules to be eligible for SBA loan. If your business partner is 51%+ owner of the business, you are not supposed to meet special criteria.  

SBA loan for non-green card holders and foreign nationals

If an applicant is not a legal permanent resident (LPR) or doesn’t have Green Card, the lender needs to determine their eligibility for SBA business loan based on statuses:

  • An individual who has been granted asylum or refuge with LPR status
  • “An alien is subject to the Immigration Reform and Control Act (IRCA) 1986.”
  • A documented alien living in the United States with a specific purpose for a specific time.

The business should also meet some other requirements that include.

  • Present management must have experience in operating the business for a minimum of 12 months before the application date, or, they need to guarantee the loan personally.
  • The applicant must have enough U.S.-based collateral to pay off the loan at any time during its tenure.

There are cases, when a business owned/managed by non-US citizens, in this case, Indian, foreign business entities, or non-immigrant aliens can also qualify for SBA loans if it meets the conditions mentioned above. As described earlier, it is up to the discretion of lenders - some lenders choose to work with non-US citizens while others not to because it can be challenging to recover loan if it goes into default.

You might come across more challenges as an immigrant, non-US citizen, lawful permanent resident, non-permanent citizen, naturalized citizen, asylee and refugee, etc. looking for loan to run business in the United States. But, like many non-US entrepreneurs who run a new business, being an India, you can also find the funding path to start a business in the USA.