EXPLAINS HOW THIS IMPACTS THE STATE. BIG CHANGES FOR CALIFORNIA’S SMALL BUSINESSES. A NEW LAW LIMITS ACCESS TO WHO QUALIFIES FOR LOANS FROM THE SMALL BUSINESS ADMINISTRATION. DESPITE CALIFORNIA HAVING THE MOST SMALL BUSINESSES AND THE LARGEST IMMIGRANT POPULATION IN THE COUNTRY, SBA BACKED LOANS ARE NO LONGER AVAILABLE TO BUSINESS OWNERS OR ASPIRING ENTREPRENEURS WHO ARE NOT U.S. CITIZENS, INCLUDING GREEN CARD HOLDERS, ASYLUM SEEKERS, REFUGEES AND DACA RECIPIENTS. IT’S A DEVASTATING HIT FOR THE LOCAL ECONOMY BECAUSE DUE TO THAT LAW, ACCESS TO CAPITAL IS GOING TO BECOME MORE DIFFICULT FOR THIS GROUP OF INDIVIDUALS. HENCE HURTING THE LOCAL ECONOMY. AND NOT ONLY THE LOCAL ECONOMY, STATE AND FEDERAL ECONOMY. FOR YEARS, SBA LOANS HAVE BEEN A KEY TOOL FOR ENTREPRENEURS, ESPECIALLY THOSE WITHOUT TRADITIONAL ACCESS TO CREDIT. THEY OFFER LOWER INTEREST RATES AND ARE OFTEN AVAILABLE TO PEOPLE WITHOUT ESTABLISHED CREDIT HISTORIES. THE SBA ALSO BACKS LOANS FROM PRIVATE LENDERS, REDUCING RISK FOR BANKS AND EXPANDING ACCESS. BUT WITH THAT, ACCESS IS NOW RESTRICTED. BUSINESS ADVOCATES WARN IT COULD BECOME HARDER FOR MANY TO GET STARTED AND COULD PUSH SOME TOWARD RISKIER, MORE EXPENSIVE LOANS. THE CHALLENGES ARE ALREADY THERE. IT IS GOING TO ENHANCE THE MORE THE DIFFICULTY, IT’S GOING TO MAKE IT A LITTLE HARDER FOR THEM TO GET THE LOAN. WE HAVE ROOM. THIS IS THE CHALLENGE AND THE DANGER THAT THEY MIGHT BE A ROOM FOR PREDATORY LENDING, WHICH MEANS HIGHER INTEREST RATE, SHORTER TERMS, WHICH IS GOING TO HURT THE ECONOMY. EITHER WAY, IMMIGRANTS OWN ABOUT 40% OF SMALL BUSINESSES IN CALIFORNIA, CONTRIBUTING MORE THAN $20 BILLION TO THE STATE’S ECONOMY. AND UNDER THESE CHANGES, EVEN BUSINESSES PARTLY OWNED BY A NON-CITIZEN MAY NO LONGER QUALIFY FOR SBA BACKED LOANS, BUT FOR NEW LOANS THAT ARE COMING UP. EVEN IF 1% OF THE COMPANY IS OWNED BY AN IMMIGRANT, A GREEN CARD HOLDER, ASYLEE REFUGEE DACA, THEY’RE NOT GOING TO BE ABLE TO GET THE LOAN, EVEN IF THAT IS 1%. SO THEY ARE FEARFUL WITH LESS ACCESS TO CAPITAL. ADVOCATES WARN THIS COULD MEAN FEWER BUSINESSES AND FEWER JOBS ACROSS THE STATE. MARICELA DE LA CRUZ KCRA. 3 NEWS. SBA SAYS THAT THE POLICY SHIFT IS ABOUT PRIORITIZING LOANS FOR U.S. CITIZENS, POINTING TO LIMITED FUNDING AND A GOA
New federal policy limits SBA loans to U.S. citizens, impacting California’s immigrant entrepreneurs
Updated: 7:07 PM PDT Apr 6, 2026
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Green card holders and other immigrants no longer qualify for loans from the Small Business Administration due to a new federal policy that limits these loans to U.S. citizens and nationals.Despite California having the most small businesses and the largest immigrant population in the country, SBA-backed loans are no longer available to business owners or aspiring entrepreneurs who are not U.S. citizens, including green card holders, asylum seekers, refugees and DACA recipients.”It’s a devastating hit for the local economy because due to that law, access to capital is going to become more difficult for this group of individuals, hence, hurting the local economy – and not only the local economy; state and federal economy,” said Oscar Garcia, senior vice president of the California Hispanic Chambers of Commerce.For years, SBA loans have been a key tool for entrepreneurs, especially those without traditional access to credit. They offer lower interest rates and are often available to people without established credit histories. The SBA also backs loans from private lenders, reducing risk for banks and expanding access.But with that access now restricted, business advocates warn it could become harder for many to get started and could push some toward riskier, more expensive loans.”The challenges are already there. It’s going to enhance the difficulty. It’s going to make it a little harder for them to get the loan. This is the challenge and the danger that there might be room for predatory lending, which means higher interest rates, shorter terms, which is going to hurt the economy either way,” said Garcia.Garcia adds that immigrants own about 40% of small businesses in California, contributing more than $20 billion to the state’s economy. Under these changes, even businesses partly owned by a non-citizen may no longer qualify for SBA-backed loans.”For new loans, even if 1% of the company is owned by an immigrant, green card holder, asylee, refugee, DACA, they’re not going to be able to get the loan… so they are fearful,” he told KCRA 3.With less access to capital, advocates warn this could mean fewer businesses and fewer jobs across the state.The SBA says the policy shift is about prioritizing loans for U.S. citizens, pointing to limited funding and a goal of directing taxpayer-backed loans toward American business owners and job creation.The SBA released the following statement to KCRA 3: “The Trump SBA has been very consistent: we are committed to driving economic growth and job creation for American citizens – which is why the agency implemented citizenship verification across its loan programs and why it will no longer guarantee loans for small businesses owned by foreign nationals. In FY25, SBA approved 3,358 loans for small businesses owned in part by a lawful permanent resident (LPR), largely during the Biden Administration. This represents 4% of the total 85,000 loans approved by the agency. Because SBA has a finite lending capacity, the agency’s rule change will help ensure more American citizens have access to funding previously granted to noncitizens. Across every program, the SBA is ensuring that every taxpayer dollar entrusted to this agency goes to support U.S. job creators and workers.” See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel
Green card holders and other immigrants no longer qualify for loans from the Small Business Administration due to a new federal policy that limits these loans to U.S. citizens and nationals.
Despite California having the most small businesses and the largest immigrant population in the country, SBA-backed loans are no longer available to business owners or aspiring entrepreneurs who are not U.S. citizens, including green card holders, asylum seekers, refugees and DACA recipients.
“It’s a devastating hit for the local economy because due to that law, access to capital is going to become more difficult for this group of individuals, hence, hurting the local economy – and not only the local economy; [the] state and federal economy,” said Oscar Garcia, senior vice president of the California Hispanic Chambers of Commerce.
For years, SBA loans have been a key tool for entrepreneurs, especially those without traditional access to credit. They offer lower interest rates and are often available to people without established credit histories. The SBA also backs loans from private lenders, reducing risk for banks and expanding access.
But with that access now restricted, business advocates warn it could become harder for many to get started and could push some toward riskier, more expensive loans.
“The challenges are already there. It’s going to enhance the difficulty. It’s going to make it a little harder for them to get the loan. This is the challenge and the danger that there might be room for predatory lending, which means higher interest rates, shorter terms, which is going to hurt the economy either way,” said Garcia.
Garcia adds that immigrants own about 40% of small businesses in California, contributing more than $20 billion to the state’s economy. Under these changes, even businesses partly owned by a non-citizen may no longer qualify for SBA-backed loans.
“For new loans, even if 1% of the company is owned by an immigrant, green card holder, asylee, refugee, DACA, they’re not going to be able to get the loan… so they are fearful,” he told KCRA 3.
With less access to capital, advocates warn this could mean fewer businesses and fewer jobs across the state.
The SBA says the policy shift is about prioritizing loans for U.S. citizens, pointing to limited funding and a goal of directing taxpayer-backed loans toward American business owners and job creation.
The SBA released the following statement to KCRA 3: “The Trump SBA has been very consistent: we are committed to driving economic growth and job creation for American citizens – which is why the agency implemented citizenship verification across its loan programs and why it will no longer guarantee loans for small businesses owned by foreign nationals. In FY25, SBA approved 3,358 loans for small businesses owned in part by a lawful permanent resident (LPR), largely during the Biden Administration. This represents 4% of the total 85,000 loans approved by the agency. Because SBA has a finite lending capacity, the agency’s rule change will help ensure more American citizens have access to funding previously granted to noncitizens. Across every program, the SBA is ensuring that every taxpayer dollar entrusted to this agency goes to support U.S. job creators and workers.”
See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel