SAN FRANCISCO — Green-card holders no longer qualify for loans from the Small Business Administration, eliminating a longtime source of financing for immigrants that advocates say will discourage job creation and harm the economy.
The SBA limited access to its loans to U.S. citizens and nationals only starting in March, and expanded that policy to SBA-backed loans beginning in April. On top of that, any business that’s even partly owned by a permanent legal resident with a green card is no longer eligible for the loans.
FILE – The U.S. Small Business Administration logo is shown on the agency website on Tuesday, June 25, 2024 in New York.
(AP Photo/Peter Morgan, File)
California – which has the most small businesses and the largest immigrant population in the nation – could be most affected. SBA loans have been important to immigrant entrepreneurs because they typically are low-interest and available to those without an established credit history. The agency has also backed loans by private funders, providing a government guarantee for people banks may deem riskier. Now, all those loans are off the table for owners and would-be owners of restaurants, bake shops, law practices, medical clinics, taxi medallions, nail salons and more who hold green cards.
Small business owners are responsible for 99% of net new jobs in the state, according to the California Office of the Small Business Advocate. Immigrant entrepreneurs make up 40% of the state’s business community and generated $28.4 billion in income in 2023, according to GO-Biz, the governor’s office of business and economic development.
Small Business Majority, a national business advocacy group, 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 and chambers of commerce, called the new policies “a misguided approach that ignores critical economic data underscoring the job creating power of the immigrant community.”
The SBA has a limited lending capacity, said Maggie Clemmons, a spokesperson for the agency. “The agency’s rule change will help ensure more American citizens have access to funding previously granted to noncitizens,” she said in an email.
The SBA approved 3,358 loans for small businesses owned partly by a lawful permanent resident in fiscal year 2025, largely during the Biden administration, Clemmons said. That represented 4% of the 85,000 loans approved by the agency. In California, the changes could affect about 220,000 small business owners who hold green cards, said Carolina Martinez, chief executive of CAMEO Network, a national association of organizations that support small businesses.
“The most important thing for us is to really understand that this SBA decision… is really bad for the American economy,” Martinez said.
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