Key Takeaways
- The Trump Administration is prohibiting companies with any degree of non-citizen ownership from accessing federal small business loans, effective March 1.
- This new directive excludes lawful permanent residents from loan eligibility, potentially impacting over 5 million individuals according to U.S. Census data.
- Critics have condemned President Trump’s loan restrictions as detrimental to the economy and disparaging toward immigrants.
The Small Business Administration (SBA) is enacting a lending ban on any business with non-citizen ownership, thereby excluding more than 5 million entrepreneurs from federal loan opportunities.
Commencing March 1, the SBA will cease lending to any business with even a modicum of foreign ownership, a significant reduction from the previous allowance of up to 5%.
This announcement, made on Monday, marks another stride in President Donald Trump’s initiative to sever legal immigrants’ access to government resources and support.
Prior to Trump’s re-election bid in 2025, the SBA permitted loans to firms that were at least 51% owned by citizens or lawful permanent residents, while illegal immigrants had already been excluded.
By eliminating the possibility for lawful permanent residents to secure loans, the SBA is poised to impact millions of enterprises.
While the SBA has not disclosed the extent of the $44.8 billion allocated through its two major programs in fiscal 2025 to non-citizen business proprietors, Census Bureau data reveal that non-citizens constitute a substantial portion of small business owners.
As of 2023, an estimated 5.2 million owner-operators were non-citizens, representing 15.9% of all non-employer businesses nationwide.
What This Means For The Economy
Though the SBA did not clarify the number of individuals affected by the forthcoming policy, the administration’s loan restrictions could significantly obstruct many small businesses from securing vital funding, a situation critics argue will have adverse economic ramifications.
In its announcement on Monday, the SBA indicated that these alterations align with an executive order issued by Trump on his first day in office, aptly named “Protecting The American People Against Invasion,” which initiated a comprehensive governmental crackdown on immigration.
Alongside the new loan restrictions, the administration has rendered various legal immigrants ineligible for other federal benefits, such as Medicaid and food assistance.
Opponents of the administration assert that these modifications adversely affect lawful immigrants and businesses with partial immigrant ownership.
A coalition of Democratic lawmakers, spearheaded by Massachusetts Senator Ed Markey, articulated in a letter to the SBA in December: Small businesses utilize SBA loans to foster job creation and enhance their operations.
Unfortunately, the Trump administration is vilifying immigrant communities and selectively determining loan eligibility, rather than prioritizing a business’s repayment capabilities.
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