US Federal Agency Halts Crucial Funding for Immigrant Entrepreneurs
The Small Business Administration (SBA), the federal agency dedicated to supporting small enterprises, has made a historic decision by terminating a critical financial resource for immigrant entrepreneurs.
For the first time, legal permanent residents, or green card holders, have been deemed ineligible for loans backed by the agency.
This policy shift, initially disclosed in February, aligns with the SBA’s new “America First” agenda under Administrator Kelly Loeffler, an affluent supporter of Donald Trump who assumed her post last February.
Small business proprietors are expressing profound dismay at this ruling. “I’m really shocked,” remarked Aneesa Waheed, a restaurateur and chef at Tara Kitchen, which has five New York and New Jersey locations specializing in Moroccan cuisine.
A naturalized citizen and the SBA’s New York State Small Business Person of the Year in 2024, Waheed stated, “I’ve been navigating the SBA landscape for years… It’s a conduit for support, transcending political affiliations.”
The SBA was established in 1953 to facilitate the growth of small businesses, primarily through its loan programs. Although the agency does not lend directly to businesses, it guarantees portions of loans issued by banks and other financial institutions.
Typically, businesses with 500 or fewer employees qualify as small entities, with loan amounts ranging from $50,000 to $5 million
In fiscal year 2025, the SBA disbursed over $44 billion in loans to small businesses, covering a variety of enterprises from retail stores and restaurants to manufacturing and transportation services.
While garnering support for small businesses is traditionally a bipartisan endeavor, the SBA under Loeffler has adopted a markedly pro-Trump stance.
In June, she revised loan program regulations to require that 100% of a business be owned by either citizens or green card holders to qualify for funding, reversing the previous stipulation of 51% ownership.
Furthermore, Loeffler indicated that SBA regional offices would relocate from sanctuary cities opposing Trump’s policies.
“Trump has reestablished confidence and opportunity on Main Street through a pragmatic economic agenda aimed at prioritizing hardworking families and small businesses over ‘Washington bureaucrats, illegal aliens, or coastal elites,’” Loeffler vocalized in an op-ed featured on the SBA’s website earlier this year.
Prior to her SBA tenure, Loeffler held a brief position as Georgia’s interim U.S. senator, ultimately losing to Democrat Raphael Warnock in 2022. Despite being implicated in insider trading accusations at the pandemic’s onset, she was later cleared by the Department of Justice in May 2020.
Loeffler and her husband, Jeffrey Sprecher—CEO of the financial marketplace Intercontinental Exchange and former chair of the New York Stock Exchange—are known for their significant contributions to Trump’s campaigns, amounting to $13.5 million since 2020.
The recent eligibility changes have unsettled stakeholders who assist entrepreneurs in acquiring SBA loans. “SBA loans are fundamentally designed for those lacking access to credit on comparable terms absent government backing,” explained Keegan McBride, co-founder of SBA Source, a firm specializing in securing SBA loans, particularly within the franchise sector. “This shift presents formidable challenges, as the SBA has traditionally served to bridge that financing gap.”
Many franchise owners are immigrants, comprising both green card holders and naturalized citizens. Under the revised policy, even married couples aspiring to start a joint business will find themselves unable to secure SBA loans unless both partners are U.S. citizens. Alternative funding sources exist, but acquiring them can be considerably more strenuous.
“For most individuals, securing an unsecured line of credit, let alone a substantial one, is not feasible,” McBride pointed out. “Home equity or an investment portfolio is typically necessary to back such credit lines.”
Green card holders are lawful permanent residents who must often wait a minimum of five years—three if married to a citizen—before pursuing U.S. citizenship, with additional time required for the application process.
Some immigrants opt to maintain their permanent resident status due to their home nation’s restrictions on dual citizenship, unwilling to relinquish their original nationality. Consequently, these entrepreneurs may face permanent exclusion from SBA loans under the new guidelines.
Aissatou Barry-Fall, CEO of the Lower East Side People’s Federal Credit Union, a New York City nonprofit SBA lender, condemned the new policy as lacking rationale. “It amounts to discrimination,” Barry-Fall asserted. “That’s precisely what it is.”
In a statement to the Guardian, SBA spokesperson Maggie Clemmons emphasized the agency’s commitment to fostering economic expansion and job creation for American citizens, affirming that every taxpayer dollar should support “U.S. job creators and innovators.”
Waheed, who emigrated from India as a teenager, warned that excluding green card holders from loan opportunities will likely have detrimental effects on communities, as thriving businesses tend to employ local talent, contribute taxes, and enhance neighborhood vitality.
“Individuals here on green cards have demonstrated their commitment to this country,” Waheed noted.
Amidst promises of an improved economy from Trump, Waheed lamented the harsh realities facing small businesses.
“Consider the wave of closures, job losses, and unprecedented numbers of restaurants and small enterprises shutting down,” she stated.
“It appears the focus is solely on stock indices like the S&P and the Dow, rather than the struggles of small business owners.”
Source link: Theguardian.com.
