The U.S. Small Business Administration (SBA) has implemented a significant policy change, effective March 2025, that restricts access to its small-business loan programs exclusively to businesses fully owned by U.S. citizens. This marks a historic shift, as the SBA previously allowed lawful permanent residents (green-card holders) to qualify for these loans. The change is part of a broader Trump administration effort to limit noncitizens’ access to federal benefits, with SBA Administrator Kelly Loeffler stating the agency is „unapologetic” about prioritizing American citizens. The policy has raised alarms among immigrant entrepreneurs, who are statistically more likely to start businesses than native-born Americans, and represents a departure from decades of SBA practice that supported legal residents in building businesses and creating jobs.
The impact of this policy is already visible, with businesses owned by legal permanent residents encountering sudden loan denials and stalled deals. For example, Sayuri Tsuchitani, a green-card holder from Japan, used SBA pandemic loans to open a successful chain of Japanese head spas, employing 10 people. Under the new rules, she would be disqualified despite paying taxes and contributing to the economy. Similarly, Cristina Foanene, a Romanian immigrant now a U.S. citizen, credits SBA loans with expanding her glass company and hiring 30 employees. These stories illustrate how immigrant entrepreneurs often rely on SBA loans as a critical stepping stone, especially since conventional banks are hesitant to lend to small businesses. Without this support, many may turn to risky alternatives like merchant cash advances or abandon growth plans altogether.
Critics, including small-business advisors and Democratic lawmakers, warn the policy will hinder job creation and economic growth. Eda Henries, a small-business fund manager, notes that lenders are now more cautious, delaying deals for businesses that employ dozens and generate tax revenue. The SBA has countered that only 4% of last year’s loans went to permanent residents, and the change will reserve taxpayer dollars for citizens. However, research shows immigrants launch a disproportionate share of startups, including two-thirds of U.S. billion-dollar firms. In response, Senator Ed Markey and Representative Nydia Velázquez have introduced legislation to restore green-card holders’ eligibility. Meanwhile, affected business owners, fearful of drawing attention to their status, are left in limbo, questioning whether the administration will recognize the broader economic value of immigrant entrepreneurship.
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