The Ownership Test
“The proudest human that walks the earth is a free American citizen.” — Dwight D. Eisenhower; Quote of the Day
Leadership Insights
Zenger Folkman’s research across 51,896 executives found that leaders who ranked in the top 10% for asking others for feedback were rated at the 86th percentile in overall leadership effectiveness. Leaders in the bottom 10% for seeking feedback scored at only the 15th percentile -- a 71-point gap driven by a single behavior. The most effective leaders asked more people for feedback and asked more often, treating input from bosses, peers, and subordinates as standard practice rather than a vulnerability. This week, ask one colleague and one direct report a specific question about your leadership: “What is one thing I could do differently to be more effective?”
Your Morning Pulse
World
The New START treaty expires today, ending the last legally binding limits on U.S. and Russian strategic nuclear arsenals for the first time since the early 1970s. The 2010 agreement capped each side at 1,550 deployed strategic warheads and 700 deployed launchers. Russia proposed a voluntary one-year extension of the limits; President Trump has been noncommittal, saying he prefers negotiating a “better agreement” that includes China.
A U.S. F-35 shot down an Iranian drone approaching the USS Abraham Lincoln in the Arabian Sea, while IRGC forces harassed a U.S.-flagged tanker in the Strait of Hormuz. Iran is demanding changes to the venue and format for Friday’s nuclear talks, pushing for bilateral talks in Oman rather than the planned multilateral session in Istanbul.
Politics (US)
Trump reiterated his call to “nationalize” elections, claiming state elections are corrupt. Senate Majority Leader John Thune rejected the idea, calling it “a constitutional issue.” House Republicans canceled a planned criminal contempt vote against the Clintons after the couple agreed to testify on camera this month in the Epstein investigation.
The Pentagon issued a public warning to Scouting America (formerly Boy Scouts), saying the organization risks losing its military partnership unless it implements “core value reforms.” Pentagon spokesperson Sean Parnell said, “Back to God and country -- immediately!” The military is finalizing plans to end all support for the Scouts, seeking input from the National Guard and active-duty components on the potential impact.
Economy
Private sector employers added just 22,000 jobs in January, roughly half the 45,000 economists expected, according to ADP’s National Employment Report released this morning. December was revised down from 41,000 to 37,000. Education and health services drove all gains (+74,000), while professional and business services shed 57,000 jobs and manufacturing lost another 8,000. For all of 2025, private employers added just 398,000 jobs, down from 771,000 in 2024. The official BLS jobs report, delayed by the shutdown, will now be released February 11.
Tech
Data center operators are taking energy supply into their own hands as AI power demand outpaces grid capacity, with a Bloom Energy report finding one-third of hyperscalers and colocation providers now plan fully self-powered campuses by 2030.
The Big Picture
Nuclear guardrails disappear Thursday: New START’s expiration removes the last legally binding cap on U.S. and Russian strategic arsenals, ending over five decades of bilateral nuclear arms control and raising risks of miscalculation just as China’s warhead stockpile approaches 600.
Hiring concentrated in a single sector signals fragility: ADP data shows education and health services accounted for all January job gains while nearly every other sector contracted, a pattern ADP’s chief economist called the “narrowing pathway to job creation.”
DHS deadline creates a February 13 inflection point: The two-week funding extension for the Department of Homeland Security expires nine days from now, giving congressional negotiators almost no runway to resolve disputes over ICE/CBP oversight before another potential lapse.
SBA quietly bars green card holders from loan programs: A new policy effective March 1 requires 100% U.S. citizen ownership for SBA-backed loans, the second reversal of citizenship rules in two months with significant implications for immigrant-owned businesses and the lending ecosystem that supports them.
Iran tensions escalate on three fronts simultaneously: The U.S. shot down an Iranian drone, IRGC forces harassed a U.S. tanker, and Iran is demanding changes to the format of nuclear talks all within 24 hours, compressing diplomatic and military dynamics in ways that narrow the window for negotiation.
The Ownership Test: SBA Bars Green Card Holders from America’s Primary Small Business Loan Program
While the government shutdown’s end and New START’s expiration dominated headlines yesterday, the Small Business Administration quietly issued a policy change with far-reaching consequences for immigrant entrepreneurship, federal lending, and the small business ecosystem. The development has received minimal mainstream attention relative to its impact.
What Happened
On Monday, the SBA released new policy guidance requiring that 100% of all direct and indirect owners of a small business applying for the agency’s 7(a) and 504 loan programs be U.S. citizens or U.S. nationals with principal residences within the United States. The policy, effective March 1, bars legal permanent residents -- commonly known as green card holders -- from holding any ownership stake in a business seeking SBA-backed financing.
This represents the second reversal of SBA citizenship rules in less than two months. In 2025, the agency tightened ownership requirements from a 51% U.S. citizen threshold to 100%, while still permitting lawful permanent residents. In December, a policy notice allowed up to 5% foreign national ownership while specifically barring Chinese citizens. The current rule rescinds that exception entirely and extends the ban to green card holders, who previously qualified as eligible owners.
The 7(a) program is the SBA’s primary lending vehicle, providing loan guarantees of up to $5 million for working capital, equipment purchases, real estate acquisition, and debt refinancing. The 504 program finances commercial real estate and heavy equipment. Together, these programs form the backbone of government-backed small business lending.
Why This Matters
The policy’s most immediate impact falls on businesses already in the loan pipeline. Any loan involving a legal permanent resident owner must receive an SBA loan number before March 1 to remain eligible. Frank Gallegos, executive director of Cen Cal Business Finance Group, told The Business Journal that it is “unlikely affected borrowers can restructure ownership and complete approvals in time.” Some borrowers may be forced to transfer ownership to U.S. citizen family members or seek conventional financing with significantly higher down payment requirements.
The broader economic implications are substantial. The Small Business Majority noted that immigrants are twice as likely to start a business as native-born U.S. citizens. CEO John Arensmeyer warned the move “will have a negative impact on small business creation throughout this country for years to come.” The CAMEO Network, which represents community lenders, characterized the guidance as discriminatory and plans to work with lawmakers to challenge it.
SBA spokesperson Maggie Clemmons defended the change, stating the agency is “committed to driving economic growth and job creation for American citizens” and ensuring “every taxpayer dollar entrusted to this agency goes to support U.S. job creators and innovators.” House Small Business Chair Roger Williams (R-TX) acknowledged the approach has limitations, saying “some options aren’t the best. Maybe we need to have one and grow from there.”
Strategic Implications for Leaders
For government relations professionals: The SBA rule change illustrates how administrative policy notices can reshape entire lending markets without congressional action. The December-to-February policy whiplash -- from permitting 5% foreign ownership to banning all non-citizen ownership -- creates regulatory uncertainty that extends well beyond the directly affected borrowers. Clients with any international ownership structure in their small business portfolios should conduct immediate eligibility reviews.
For business leaders and lenders: The 26-day window between announcement and implementation leaves almost no time for affected borrowers to restructure. Lenders serving immigrant communities face pipeline disruptions for loans already in process. Organizations that finance or support small business creation -- from community development financial institutions to business incubators -- need contingency strategies for clients who will lose access to government-backed lending.
For policymakers and advocacy organizations: The policy raises questions about the SBA’s statutory mission to expand capital access for small businesses. Sen. Edward Markey (D-MA) and Rep. Nydia Velazquez (D-NY), the ranking members on both chambers’ small business committees, condemned the move as a “devastating attack on immigrant entrepreneurs.” The legal and political challenges ahead will test whether administrative guidance can effectively override the agency’s broader mandate.
What’s Next
The CAMEO Network has signaled it will work with lawmakers to challenge the policy. Legal permanent residents who already hold SBA loans are not affected, but any new applications or modifications after March 1 will require full U.S. citizen ownership. The policy’s interaction with existing SBA disaster loan programs -- where the agency makes direct loans rather than guarantees -- remains unclear.
Congress faces competing deadlines that may limit bandwidth for addressing the SBA change: the February 13 DHS funding expiration and the ongoing uncertainty around BLS economic data delayed by the shutdown. The January jobs report, now scheduled for February 11, will be the first comprehensive labor market snapshot since November, arriving just two days before DHS funding lapses.
One More Thing
The most revealing aspect of this policy shift is the speed and direction of its evolution. In less than a year, the SBA moved from requiring 51% U.S. citizen ownership to 100% citizen ownership that excluded only non-permanent residents, to briefly allowing 5% foreign ownership, to now banning green card holders entirely. Each iteration arrived as an administrative policy notice rather than a rulemaking subject to public comment. For leaders managing businesses with any international ownership dimension, the lesson extends beyond immigration policy: when agencies demonstrate a pattern of tightening restrictions through successive policy notices, the prudent assumption is that the next iteration will be more restrictive, not less. Organizations that plan for the most restrictive plausible interpretation of administrative guidance will navigate this landscape more effectively than those who wait for final clarity that may never arrive.