SBA stops small-business loans to firms not fully owned by U.S. citizens
8 reported2 unconfirmed
The U.S. Small Business Administration (SBA) in March stopped approving loans to businesses that are not fully owned by U.S. citizens, a policy change that affects lawful permanent residents (green-card holders) for the first time in the agency’s history. The change is part of a broader Trump administration effort to limit noncitizens’ access to federal programs. SBA Administrator Kelly Loeffler has said the loans “are for American citizens, and we’re unapologetic about it,” citing an audit that found one six-figure loan approved for a business partly owned by an immigrant without legal status. Agency spokesperson Maggie Clemmons stated the rule change will help ensure more American citizens access funding previously granted to noncitizens. Some Democrats in Congress, including Sen. Ed Markey and Rep. Nydia Velázquez, have introduced a bill to restore eligibility for legal permanent residents. Business owners affected by the change report that lenders have slowed or halted loan processing, and some declined to speak on the record for fear of drawing attention to their immigration status.
What’s reported
The SBA stopped approving loans to firms not fully owned by U.S. citizens in March, a first in the agency’s history.
The policy applies to lawful permanent residents (green-card holders), who pay U.S. taxes.
SBA Administrator Kelly Loeffler said the loans “are for American citizens, and we’re unapologetic about it.”
The SBA cited an audit that found one six-figure loan approved for a business 49% owned by an immigrant without legal status.
Of all SBA loans last year, 4% went to businesses involving permanent residents.
Research cited in the article says immigrants run 20% to 25% of U.S. businesses, and immigrants and their children have launched two-thirds of startups valued over $1 billion.
Some Democrats in Congress introduced a bill to restore eligibility for legal permanent residents.
Business owners reported that lenders have slowed or halted loan processing due to the policy.
Open questions
The potential impact of the policy on future job and business creation in the U.S. is not addressed by the SBA, which did not respond to NPR’s questions on that topic.
It is unclear how many businesses have been denied loans or had deals halted since the policy change.
Key figures
Sayuri Tsuchitani – green-card holder and entrepreneur from Japan who opened a Japanese head spa with a pandemic-era SBA loan.
Eda Henries – small-business adviser who helps firms raise and manage funds.
Kelly Loeffler – head of the SBA.
Maggie Clemmons – SBA spokesperson.
Cristina Foanene – Romanian-born entrepreneur who became a U.S. citizen and received three SBA loans for her glass company in Fresno, Calif.
Sen. Ed Markey (D-Mass.) – co-sponsor of bill to restore eligibility.
Rep. Nydia Velázquez (D-N.Y.) – co-sponsor of bill to restore eligibility.
Sources: NPR
