Big shift leaves some green-card entrepreneurs shut out of SBA-backed lending
The U.S. Small Business Administration is narrowing eligibility for the loans it makes and the loans it supports with guarantees, ending access for green-card holders and other non-citizens in a change that advocates say could ripple through California’s small-business sector. The SBA limited access to its own loans to U.S. citizens and nationals starting in March, then expanded that restriction to SBA-backed loans beginning in April, according to the reporting.
Under the SBA’s updated policy, businesses that are even partly owned by a lawful permanent resident holding a green card are no longer eligible for the agency’s loan programs. Advocates and business groups said that would remove a financing pathway that has historically helped immigrant entrepreneurs—especially those who may not have an established credit history.
An email spokesperson for the SBA, Maggie Clemmons, said the agency’s policy change is intended to address demand for a limited lending capacity by prioritizing people eligible under the new rules. Clemmons said in the email that “The agency’s rule change will help ensure more American citizens have access to funding previously granted to noncitizens.”
Advocates described the shift as an economic setback and as part of a broader pattern of removing federal support from immigrants who are legally in the U.S. Small Business Majority wrote to the SBA in mid-March, urging the federal agency to reconsider the changes. The letter, signed by dozens of state and national groups as well as chambers of commerce, called the policy “a misguided approach that ignores critical economic data underscoring the job creating power of the immigrant community.”
In numbers cited by advocates, the SBA approved 3,358 loans for small businesses owned partly by a lawful permanent resident in fiscal year 2025. Clemmons said that represented 4% of the roughly 85,000 loans approved by the agency, largely during the Biden administration. In California, CAMEO Network’s Carolina Martinez said the SBA changes could affect about 220,000 small business owners who hold green cards, and she said the decision is “really bad for the American economy.”
Entrepreneurs with green cards said the change threatens businesses built with SBA-backed financing. Cristina Foanene, a Romanian immigrant who arrived in the U.S. about 20 years ago and held a green card when she obtained an SBA loan in 2018, said the financing allowed her and her husband to buy a building and expand MCS Glass in Fresno, where they now have about 30 employees. Foanene said in the reporting that “The loan gave us an opportunity to create more jobs, to have an even greater impact in our community,” and said they later took out a third loan, with her describing the first loan after the couple became American citizens.
Dung Nguyen, program and organizing director for the California Healthy Nail Salon Collaborative, said that SBA loans were crucial for some nail-salon owners and workers during the pandemic and that borrowers are still repaying those loans. Nguyen said the group signed the Small Business Majority letter to the SBA, and described the lasting consequences of losing that safety net for legally present entrepreneurs.
Other business groups said the SBA’s policy shift could push green-card holders toward more informal or less reliable forms of support. Kenia Zamarripa, a spokesperson for the San Diego Regional Chamber of Commerce, said the policy change reflects how immigrants can be made more vulnerable as federal funds for other programs are reduced and said the chamber is pushing for immigration reform that includes a standardized path to citizenship. Zamarripa said the change pushes green-card holders to “informality” and argued it is like “you’re punishing them for doing the right thing.”
Mission Asset Fund, a San Francisco organization that supports and lends to small business owners, also raised concerns. Gabriela Alemán, a spokesperson for the group, said green-card holders are being pushed into “a new kind of status,” and she noted that Mission Asset Fund’s lending circles—modeled on Mexican community-based lending practices called tandas—provide up to $2,500 to entrepreneurs. Alemán said the organization is working toward being able to provide larger loans and said it could be difficult for groups like hers to fill the gap left by the SBA’s new policies for permanent legal residents.
Some lenders and advocates said the SBA’s change is likely to affect the availability of larger financing options. Brian Kennedy Jr., an entrepreneur ecosystem director at AmPac Business Capital, said there are not “any other options at this scale (that the SBA provides)” and described a gap between alternative lending amounts of about $35,000 up to $30 million, as reported.
For some small business support groups, the policy change also means a shift in how they refer entrepreneurs to lenders. Pamela Deans, the executive director of Microenterprise Collaborative of Inland Southern California, said the SBA’s policy change will alter how the organization points entrepreneurs to sources of capital. Deans said that rather than pointing clients to “a relatively straightforward” SBA process, the group will inform them about a more fragmented set of options and warn them about predatory lending, adding that some would-be owners could face difficulty assembling safe and affordable capital to cover early costs such as leasing and equipment.
Advocates warned that as entrepreneurs shop for financing, the risk of exploitative lending may increase. Bianca Blomquist, California director for Small Business Majority, said her group recently learned that an owner of a child care business in downtown Los Angeles took out a $10,000 loan at an interest rate the owner thought was 13%, but that it was closer to 250%. Other advocates said they hope philanthropy and impact investors step in with more capital for smaller lenders.
Leticia Landa, executive director of La Cocina, a San Francisco business incubator, said women, entrepreneurs, immigrants, and communities of color have often had to “think outside the typical paths” when trying to access capital. She said she hopes California will “come up with something” to help support entrepreneurs as the SBA’s eligibility rules change for green-card holders and businesses with partial lawful permanent resident ownership.