Green card (File Photo – groovymother)
Rep. Judy Chu (D-Calif.) condemned a new Small Business Administration rule that will bar green card holders from accessing the agency’s primary small business loan programs, calling the move harmful to immigrant communities and the broader U.S. economy.
By News Desk
The SBA announced that effective March 1, lawful permanent residents will no longer be eligible to apply for its flagship 7(a) and 504 loan programs. Under the new rule, a business will be deemed ineligible for these loans if even 1 percent of its ownership is held by a non-citizen.
“This decision unfairly targets immigrant communities and will harm not only immigrant small business owners, but the American economy as a whole,” Chu said in a statement.
Chu, who represents California’s 28th Congressional District in the San Gabriel Valley, emphasized the economic role immigrant entrepreneurs play locally and nationwide. She noted that immigrant-owned businesses employ millions of workers, including large numbers of U.S. citizens, and are a key driver of local economic growth.
“For so many, access to capital is what makes it possible to start a business, keep the doors open, and keep workers employed,” Chu said. She highlighted SBA programs such as 7(a), 504, and the Community Advantage program, which provides loans and technical assistance to underserved businesses. Chu added that these programs operate with zero subsidy and do not cost taxpayers.
The March 1 policy change builds on SBA guidance issued December 19 that already restricted eligibility for businesses with more than 5 percent ownership by a foreign national, green card holder, or U.S. citizen living abroad. That earlier guidance also eliminated eligibility for businesses with any ownership by Chinese nationals, a category that includes many Chinese American immigrants who have lived in the United States for decades.
Chu described the cumulative impact of the policies as part of a broader pattern of targeting immigrant communities. “This is not just bad policy,” she said. “It is xenophobic, economically reckless, and a betrayal of the very promise of opportunity that defines the American Dream.”
Data cited by Chu underscore the potential scope of the impact. Immigrants start new businesses at twice the rate of U.S.-born residents and are more likely to create jobs. Nationwide, more than 3 million Asian American, Native Hawaiian, and Pacific Islander–owned businesses employ 5.2 million people and generate nearly $1 trillion in annual sales, while more than 5 million Hispanic-owned businesses contribute $800 billion to the economy each year.
California has the highest number of immigrant entrepreneurs in the country, with more than 829,000 immigrant-owned businesses. In the San Gabriel Valley alone, Asian Americans own nearly 82,000 businesses, which collectively issue more than $2.7 billion in annual payroll.
In fiscal year 2024, the SBA supported 8,900 loans to Asian-owned businesses totaling $7.2 billion, representing a 70 percent increase in the number of Asian-owned firms funded since fiscal year 2020.
Chu warned that restricting access to SBA loans will lead to business closures and job losses, affecting both immigrant and non-immigrant workers across the country.
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