Green Card and SBA Loans: The New Rule that Impacts Immigrant Entrepreneurs in the U.S.
by carlos david cuello - se habla media
In recent months, the SBA had already tightened the requirements, reducing the margin of foreign participation allowed in applicant companies.
Permanent residents of the United States, known as “green card” holders, will no longer qualify for loans backed by the Small Business Administration (SBA) as of March 1, the agency confirmed in a memo limiting the benefit to wholly American-owned businesses in the United States. The measure is part of a series of changes promoted during the current administration and represents a significant shift in access to financing for small businesses.
The most affected program is the 7(a) loan, one of the most used by entrepreneurs and small businesses throughout the country, with amounts that can reach up to five million dollars. These loans typically offer more favorable rates than traditional business loans and are distributed through licensed banks and lenders, backed by the federal government.
In recent months, the SBA had already tightened the requirements, reducing the margin of foreign participation allowed in applicant companies. Previously, a business could qualify if at least 51% of it was owned by a U.S. citizen residing in the country. With the new guidelines, the exclusion directly reaches permanent residents, which has generated concern among business organizations and political leaders.
Democratic lawmakers such as Sen. Edward J. Markey and Rep. Nydia Velazquez criticized the decision and warned that it could affect thousands of entrepreneurs. The congressmen argue that the measure could slow down the creation of companies and limit economic opportunities, especially in sectors where immigrants have played a prominent role in generating employment.
Small business advocacy groups have also expressed concern. The organization Small Business Majority pointed out that immigrants have a disproportionate share in the creation of new businesses in the United States and that harsher restrictions could translate into fewer entrepreneurships and lower economic growth in the coming years.
For the Latino community living in Washington state, where many permanent residents work or start businesses in sectors such as services, commerce and construction, the changes could have direct effects on access to financing and business expansion. Experts recommend that business owners inform themselves about the new rules, explore alternative credit options and closely monitor possible lawsuits or court decisions that may modify the application of the rule.
This article is published with Se Habla Media’s permission.
