Top Democrats have raised concerns over a new Small Business Administration policy that prevents businesses owned by legal permanent residents from accessing SBA loans. Sen. Edward J. Markey and Rep. Nydia Velazquez criticized the move, stating that it negatively impacts immigrant entrepreneurs and local economies. The policy, effective from March 1, mandates that 100% ownership of a small business seeking SBA-backed loans must belong to US citizens or nationals residing in the US.
The new rule bars legal permanent residents, commonly known as green card holders, from holding any ownership stake in businesses applying for SBA loans. This policy reversal by the Trump administration has drawn strong criticism from Democrats, who accuse the SBA of spreading fear and confusion among immigrants and small business owners. The lawmakers emphasized that the move contradicts the American Dream by excluding lawful immigrants from pursuing business opportunities.
Democratic lawmakers highlighted that the SBA’s recent policy changes have led to a significant decline in access to SBA loans. They expressed concerns over the confusion faced by lenders and borrowers due to the stringent citizenship checks introduced. The lawmakers pointed out that the stricter rules have resulted in a substantial drop in SBA loan volume, affecting the ability of small businesses, particularly those owned by immigrants, to secure essential financing.
