SBA Should Not Block Immigrants From Accessing Small Business Loans

“The U.S. Small Business Administration’s (SBA) sudden reversal of guidance that would have allowed small businesses partially owned by immigrants to obtain SBA-backed financing is a decision that will limit the growth of small businesses and jobs throughout the United States. After first severely restricting access to credit for entrepreneurs with a non-citizen ownership stake in their company, SBA in December slightly loosened those recently imposed restrictions to allow financing for businesses with a maximum non-citizen ownership of 5%. Not only has that allowance just been rescinded, but SBA has now decided to go further by also prohibiting green card holders from accessing any SBA-backed capital – a step beyond the original restrictions put in place last year. 

The latest decision by SBA fails to recognize that immigrants are twice as likely to start a business as native-born U.S. citizens. Given that reality, SBA’s severe restrictions will have a negative impact on small business creation throughout this country for years to come. What’s more, the timing of SBA’s tighter lending eligibility criteria could not be worse as small businesses are struggling with ballooning costs due to tariffs, healthcare and inflation, as well as the fact that small businesses have struggled for many years to access critical capital. In fact, Small Business Majority’s research found that among entrepreneurs who pursued funding for their business, just 36% secured a loan of any size with most receiving $50,000 or less. Nearly one-quarter (24%) reported that the funding they received was insufficient to meet their needs.

The bottom line is that making it harder for small businesses to secure the funds needed to start and grow an enterprise will not help America’s economy or address the ongoing affordability crisis. SBA should immediately reconsider its latest policy guidelines on loans and prioritize broadening eligibility rather than narrowing it.”