The Small Business Administration (SBA) has declared a significant policy change that will restrict green card holders from participating in SBA loan programs starting March 1. This update was conveyed through a formal policy notice and represents the agency's latest effort to revise loan eligibility criteria amidst organizational restructuring and regulatory tightening.
Previously, businesses seeking SBA financial assistance needed to be at least 51% owned by U.S. citizens, nationals, or lawful permanent residents. However, last year this requirement was made more stringent, raising the ownership threshold to 100%. More recently, in December, a policy note allowed for a marginal 5% ownership by non-citizens. The upcoming policy rescinds that allowance and additionally disqualifies lawful permanent residents—commonly known as green card holders—from eligibility.
According to SBA spokesperson Maggie Clemmons, the agency is prioritizing economic growth and job creation specifically for American citizens. She emphasized that "effective March 1, the agency will no longer guarantee loans for small businesses owned by foreign nationals," highlighting a commitment that taxpayer resources support solely U.S.-based job creators and entrepreneurs.
It is important to note that the SBA does not typically issue loans directly, except in disaster-related circumstances. Instead, it collaborates with private lenders to facilitate loans to small businesses, often offering more favorable interest rates compared to conventional financing options.
Responding to the new policy, Small Business Majority, a national advocacy group for small enterprises, critiqued the decision. They warned that these measures could impede the expansion of small businesses and job opportunities across the nation.
John Arensmeyer, the CEO of Small Business Majority, pointed out that immigrants are statistically twice as likely as native-born Americans to start businesses. He expressed concern that the SBA's intensified restrictions could adversely affect entrepreneurship and economic dynamism for years to come.