Ranking Members Markey and Velázquez, and Reps. Clarke, Espaillat, and Meng Condemn Arbitrary SBA Policy Barring Immigrant Entrepreneurs from Securing Vital Loans

Letter (PDF)

Ranking Member Edward J. Markey (D-Mass.), House Small Business Committee Ranking Member Nydia Velázquez (D-N.Y.), Congressional Black Caucus Chair Yvette Clarke (D-N.Y.), Congressional Hispanic Caucus Chair Adriano Espaillat (D-N.Y.), and Congressional Asian Pacific American Caucus Chair Grace Meng (D-N.Y.) sent a letter on February 24, to Small Business Administration (SBA) Administrator Kelly Loeffler condemning the agency’s new policy requiring 100 percent U.S. citizen or national ownership for small businesses seeking SBA loans. The letter urges the SBA to return to commonsense lending standards that had been in place for a quarter century.

On February 2, the SBA issued Policy Notice 5000-876441, which bars any U.S. small business with non-citizen ownership from participating in the agency’s 7(a) and 504/CDC loan programs, even if those owners are lawfully in the United States. A subsequent Procedural Notice issued on February 11 further details the new requirements. This marks the fourth time since March 2025 that the SBA has changed its guidance on citizenship requirements, creating confusion and uncertainty for lenders and borrowers alike.

Ranking Member Markey and his colleagues wrote that the policy would limit access to capital, as small businesses are already struggling under the Trump administration’s economic policies.

“At a time when President Donald Trump’s tariff and trade policies are putting immense pressure on America’s small businesses, the SBA should be focused on reducing barriers and helping more small businesses access these two important programs,” wrote the lawmakers.

The letter argues that the new citizenship requirement has no basis in sound lending practice and will hurt small businesses and the communities that depend on them for jobs, services, and economic growth.

Ranking Member Markey and his colleagues warn that the policy will also create new compliance burdens for lenders, who will need to certify the citizenship status of all direct and indirect owners. These costs could drive lenders to avoid businesses with complex ownership structures and decrease lending overall.

“We are deeply concerned that the SBA’s unclear and shifting guidance will drive lenders and program participants to halt new originations under both programs to avoid liability, cutting off access to capital and destabilizing communities and local economies across the country,” continued the lawmakers.

The letter concludes with a call for the SBA to reverse course and work with Congress to strengthen capital access programs.

“Instead of denying more American small businesses access to necessary affordable capital, we should be working together to strengthen the SBA’s capital access programs and increase financing opportunities for more small businesses in order to improve our local communities and national economy,” concluded the lawmakers.

Ranking Member Markey is fighting for small business owners and immigrants who rely on SBA loans to start and run their businesses, create jobs, and contribute to theircommunities.

• Earlier in February, Ranking Members Markey and Velázquez released a statement condemning the actions of the SBA after it announced that small businesses with legal permanent residents will be barred from receiving SBA loans.
• In December 2025, Ranking Member Markey and all Democratic members of the Senate Small Business Committee sent a letter to the SBA reiterating concerns with the citizenship requirements and highlighting a drop in SBA lending volume. Despite documented concerns from SBA lenders and borrowers about the citizenship requirements, SBA has not responded to either letter.
• In September 2025, Ranking Member Markey heard directly from SBA lendersabout the issues with the citizenship verification requirements.
• In July 2025, Ranking Members Markey and Velázquez sent a letter to the SBA expressing serious concerns with the agency’s new, draconian citizenship verification requirements that require small businesses seeking SBA loans to be 100% owned by U.S. citizens, nationals, and legal permanent residents.