SBA Loan (Photo SBA)
The Los Angeles County Board of Supervisors voted today to authorize legal action against a new federal rule that bars lawful permanent residents from receiving Small Business Administration–backed loans.
By News Desk
The motion was introduced by Chair and First District Supervisor Hilda L. Solis and coauthored by Chair Pro Tem and Second District Supervisor Holly J. Mitchell.
The decision comes in response to a Feb. 4, 2026 announcement from the U.S. Small Business Administration, which—at the request of the Trump administration—implemented a rule restricting SBA-backed loans to U.S. citizens only. The policy is set to take effect March 1. Since the agency’s creation in 1953, both U.S. citizens and lawful permanent residents have been eligible to apply for SBA loans.
Solis said the rule threatens the economic stability of immigrant communities and the broader region.
“Limiting SBA loans to only U.S. citizens deeply impacts our working families, small businesses and students, especially those from immigrant communities,” Solis said. “This new policy not only endangers our local economy but also undermines the very promise of the American Dream and generational wealth. Today’s motion reflects Los Angeles County’s commitment to stand with Angelenos and uphold the principle that hard work should lead to opportunity and stability for our communities and future generations.”
Mitchell criticized the federal action as discriminatory and harmful to economic mobility.
“What we are seeing at the federal level is not accidental. It is a systematically racist system of determining who gets access to capital and to economic advancement,” Mitchell said. “Keeping entrepreneurs and students from being able to access capital for their business or to gain an education will only lead to more predatory options for the financial support people need — this means higher interest rate loans at traditional banks or more aggressive pay-day lenders. We are standing up to that with this motion because economic opportunity should not depend on immigration status or whether your profession is politically valued.”
County officials also raised concerns about recent actions by the U.S. Department of Education, which they say could further destabilize the financial security of local families. The department has proposed changes that would “deprofessionalize” certain fields, including nursing and social work, and modify the Public Service Loan Forgiveness Program. Under the proposal, employers currently eligible for loan forgiveness could be removed if deemed to be engaged in illegal activity — a determination critics say lacks clear standards.
The motion approved today directs County Counsel to explore legal avenues to challenge both the SBA rule and the Department of Education’s proposed changes. It also instructs the Departments of Economic Opportunity, Human Resources, and Consumer and Business Affairs to report back within 90 days on how the federal actions could affect workforce development across Los Angeles County.
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