The Small Business Administration in March began denying loans to businesses not fully owned by U.S. citizens, cutting off green‑card holders from a program that has been a primary source of financing for immigrant entrepreneurs for decades.
The change, part of a broader Trump‑administration push to limit noncitizens’ access to federal programs, is already affecting business owners and lenders, according to interviews with entrepreneurs, a small‑business adviser and agency officials.
Sayuri Tsuchitani, a green‑card holder who moved from Japan 28 years ago, used a pandemic‑era SBA loan to open a Japanese head spa in Los Angeles. She expanded to three locations and hired nine employees. Under the new policy, she would no longer qualify. “The SBA led me to my success of the American Dream,” Tsuchitani told NPR.
The SBA’s new policy, first reported by NPR, disqualifies any business not entirely owned by U.S. citizens. The agency had long restricted lending to immigrants but had previously approved loans to lawful permanent residents. In March, it stopped approving those loans “for the first time in its history,” NPR reported.
SBA Administrator Kelly Loeffler has defended the change. “SBA’s small-business loans are for American citizens, and we’re unapologetic about it,” Loeffler told Newsmax in March. She cited an audit that found — and stopped — one six‑figure loan approved for a business 49% owned by an immigrant without legal status.
In a statement to NPR, agency spokesperson Maggie Clemmons said the rule change “will help ensure more American citizens have access to funding previously granted to noncitizens” and that the SBA is “ensuring that every taxpayer dollar entrusted to this agency goes to support U.S. job creators and workers.” The SBA did not respond to questions about the potential impact on future job and business creation.
Critics say the change ignores the role immigrants play in the U.S. economy. About 15% of the country’s population is foreign-born, but immigrants run 20% to 25% of businesses, according to U.S. Census data. A study published this month by the nonpartisan National Foundation for American Policy estimated that immigrants and their children have launched two‑thirds of U.S. startups valued at more than $1 billion.
Of all SBA loans last year, the agency said 4% went to businesses involving permanent residents — a modest share but one that entrepreneurs describe as transformative. For small businesses, the SBA is often the first lender to take a risk on an entrepreneur, offering affordable rates.
Cristina Foanene, who moved to the U.S. from Romania 20 years ago as an investor, said her glass company in Fresno, California, has received three SBA loans over a decade. The money allowed her to expand showrooms and manufacturing facilities and hire about 30 people. One employee recently retired after 19 years with the company. Foanene, now a citizen, said the first SBA loan made other investors comfortable lending to her business. “I don’t know where our business would be without this,” she told NPR.
Eda Henries, who runs a firm that helps small businesses raise and manage funds, said the policy change was a shock. “No one even thought for a second that would be on the table,” Henries told NPR. “No one expected that it would include legal permanent residents.”
Henries said the alternative sources of financing are scarce. Traditional banks often hesitate to lend to small firms, and she worries the SBA change will push business owners toward riskier or predatory lending, including merchant cash advances. She said lenders already are taking longer to verify every owner’s citizenship status, leaving some businesses in the lurch. “I have clients that were in the middle of underwriting,” Henries said. “These are clients that employ dozens of people and generate revenue, and pay taxes. And all of a sudden, the lenders put the brakes on.”
Eight legal permanent residents who had received or applied for SBA loans this year declined to speak to NPR on the record, for fear of drawing unwanted attention to their immigration status within the business community.
A group of Democrats in Congress, including Sen. Ed Markey of Massachusetts and Rep. Nydia Velazquez of New York — ranking members of the Senate and House small‑business committees — introduced a bill to restore the eligibility of legal permanent residents for SBA loans.
Foanene, reflecting on her naturalization, said she wonders if SBA leaders would change their minds if they heard more stories like hers. “It really made me sad,” Foanene told NPR. “If they will understand that there are people that are coming here with honest intention of building a business and creating jobs, then I feel like maybe they will say, ‘Actually it is benefiting our country.’”