More than 80,000 American jobs were supported last year by the Small Business Administration’s loans to businesses owned by green-card holders. Now, a federal policy change has shut those same entrepreneurs out of the financing programs that helped them build and expand their businesses.
In March, the SBA imposed additional loan restrictions on its 7(a) and 504 programs. Legal permanent residents, or green card holders, can no longer access the SBA’s loans. Only small businesses owned 100% by US citizens are eligible recipients. In FY25, small businesses owned by green-card holders received more than 6,100 SBA loans, amounting to $5.5 billion.
The impact of SBA loans is particularly pronounced in the Southeast, across Alabama, Kentucky, Mississippi, North Carolina, South Carolina, Georgia, Florida and Tennessee. In this region, small businesses owned by green-card holders received 1,069 loans, worth $1.1 billion, supporting more than 17,000 jobs.
The data makes it clear: SBA’s loan restrictions impact all of Main Street. Without access to SBA loans, immigrant-owned small businesses throughout the country could suffer and even shut down. Fewer of these businesses means fewer jobs and higher costs of goods and services.
“The restriction hurts our economy,” said Will Gonzalez, Executive Director of Ceiba, a Philadelphia-based organization focused on the economic development and financial inclusion of the Latino community. “Many of the entrepreneurs in our community who started businesses did their best innovative work when they had green cards […] It is crazy that we are going to close the SBA financing door to businesspeople who are here legally,” said Gonzalez.
Congress may have an opportunity to overturn the SBA’s loan restrictions.
In July, Senator Ed Markey (D-MA) and Representative Nydia Velázquez (D-NY-07) utilized the Congressional Review Act to introduce a joint resolution to restore SBA’s 7(a) and 504 loans for green-card holders. Under the Congressional Review Act, the resolution would only require a simple majority vote, bypassing the filibuster.
Over the past few months, 30 members in the Senate have signed on to a discharge petition that would move the Senate resolution, under a fast-track process, from the Senate Small Business & Entrepreneurship Committee directly onto the Senate floor. During the lame-duck session, the Senate may bring the resolution to a floor vote, ideally with bipartisan support.
Small Business Majority sent a letter to Congressional leadership, signed by 121 community organizations including NCRC, to demand they restore access to SBA financing for legal permanent residents.
The SBA’s loan restrictions concern not only community groups, but also banking institutions. American Banker recently published an article highlighting how such citizenship requirements could worsen banks’ administrative burden. Banks could face increased compliance costs associated with verifying an applicant’s citizenship status and business ownership. As a result, banks may have lengthier loan processing times for all SBA loan applicants, not just legal permanent residents.
Another way banks could be impacted; immigrant entrepreneurs may become more hesitant to go to their local bank and apply for credit. In addition to the SBA’s rule, President Trump signed an executive order directing financial regulators to inform banks that accepting Individual Taxpayer Identification Numbers (ITIN) when opening bank accounts could pose a serious risk to the financial system. Similarly, the Consumer Finance Protection Bureau (CFPB) issued guidance for banks to consider an applicant’s immigration status when making credit decisions and assessing the ability to repay a loan.
Restricting green card holders from accessing SBA loans could cost thousands of jobs with widespread impacts across the financial industry. Immigrant entrepreneurs should not have to face additional barriers for the equal opportunity to access capital, which they need to grow and thrive.
Manan Shah is a policy advisor at NCRC.
