The Small Business Administration (SBA) announced that from March 1, they will not give loans to those businesses that are not owned by US citizens. Businesses owned by legal permanent residents, Green Card holders, will not get this loan. The new policy note said 100% of all direct and indirect owners of a loan applicant have to be US citizens or US nationals who reside within the US or its territories. Green Card holders will no longer be eligible to own any percentage of a business seeking a loan from the SBA. The SBA note said that the new rule removes the narrow exception that allowed a borrower to have up to 5% ownership held by foreign nationals, or US citizens, US Nationals, or Legal Permanent Residents (Green Card holders) whose principal residence was outside of the United States, its territories, or possessions.
What does this mean for Indians?
SBA has two primary loan programs: loans for general business purposes like working capital and equipment; and 504 loans for purchasing commercial real estate and heavy equipment. The new rule means Indians who have Green Cards in the US can’t get SBA loans until they become naturalized citizens. If a Green Card holders intends to get SBA loan, they must get the loan number before March 1.Frank Gallegos, executive director of Cen Cal Business Finance Group, a Fresno-based non-profit development company, said the new rules came as a surprise. His company partners with lenders to provide SBA 504 loans. Around 10% of their loans include Green Card holders, Gallegos said, adding that these projects delivered major economic benefits locally. “We had a large nut processor in this area that we did a loan for,” he said. “It was 150 jobs, and they took an old building that had been empty for 15 years.”
‘Attack on immigrant business owners’
Congressional Democrats condemned the policy change, with Senate Small Business Committee Ranking Member Edward Markey (D-Mass.) and House Small Business Committee Ranking Member Nydia Velázquez (D-N.Y.) calling it an attack on immigrant entrepreneurs. They said the new rules came within two months of SBA’s previous rule in which they said they would allow up to 5% foreign national ownership while specifically barring Chinese citizens, In a joint statement, Markey and Velázquez said the policy contradicts the agency’s mission to support small business growth. “The Trump administration is stoking the flames of hatred, spreading fear and confusion among immigrants and small business owners,” the lawmakers said. “Rather than support hard-working legal immigrants to start or expand a business, the Trump SBA is choosing hatred by barring green card holders from receiving an SBA loan.”