SBA stops – A small-business loan helped green-card holder Sayuri Tsuchitani open a Japanese head spa in Los Angeles. Now, the SBA says it will stop approving loans for businesses not fully owned by U.S. citizens, reshaping who can access its funding. Entrepreneurs and le
When Sayuri Tsuchitani started laying the groundwork for her first storefront, the loan she received from the U.S. Small Business Administration was the bridge from possibility to rent checks and reopening plans. She had spent two decades on her feet as a hairdresser—cutting. coloring. styling—until the pandemic shut down the Los Angeles salon where she worked.
Tsuchitani recognized a chance to change course. She applied for an SBA loan. used a pandemic-era funding program. and opened a Japanese head spa offering blood-flow massages. ayurvedic oil treatments. and deep scalp cleanses. She launched one location, then added two more. From there, she hired one worker, then nine more.
But today, the SBA would disqualify her from the very program that helped her get started.
Tsuchitani is a green-card holder—also known as a lawful permanent resident. She moved from Japan 28 years ago. In March. for the first time in its history. the SBA stopped approving loans to firms that are not fully owned by U.S. citizens—citizens only. The change is sweeping enough that it would put legal permanent residents like Tsuchitani on the wrong side of eligibility. even as she built a business in the U.S. and remained a taxpayer.
The policy shift is part of the quieter side of the Trump administration’s push to discourage immigration. As other agencies have tightened who can qualify for federal programs—ranging from housing subsidies to commercial trucking licenses—the SBA moved to do the same. Early announcements used language aimed at “hostile foreign nationals” and “illegal aliens. ” but the SBA’s previous lending restrictions had long focused on whether borrowers were legally present and permanently residing.
That’s what changed.
“It was a bit of a shock to the system,” said Eda Henries, who runs a firm that helps small businesses raise and manage funds. “No one even thought for a second that would be on the table. No one expected that it would include legal permanent residents.”
In announcing the change, the agency referred to permanent residents as “foreign nationals.” The head of the SBA, Kelly Loeffler, has argued permanent residents should not benefit from American taxpayer dollars. Though permanent residents pay taxes to the U.S. government just as citizens do.
Loeffler told Newsmax in March, “SBA’s small-business loans ‘are for American citizens, and we’re unapologetic about it.’” She has also cited an audit last year that found—and stopped—one six-figure loan approved for a business 49% owned by an immigrant without legal status.
In a statement to NPR. SBA spokesperson Maggie Clemmons said. “The agency’s rule change will help ensure more American citizens have access to funding previously granted to noncitizens. Across every program, the SBA is ensuring that every taxpayer dollar entrusted to this agency goes to support U.S. job creators and workers.”.
For small business owners, the question isn’t only about rules. It’s about momentum—who gets to keep it, and who has to start over.
An SBA loan can be the first serious financing option for an entrepreneur. often with affordable rates and the willingness to take risks traditional banks sometimes avoid. Research cited in the reporting underscores how often that risk-taking lands with immigrants: about 15% of the country’s population is foreign-born. but Census data shows they run 20% to 25% of businesses. A new study this month by the nonpartisan National Foundation for American Policy estimates immigrants and their children have launched two-thirds of the country’s startups valued at more than $1 billion.
The SBA did not respond to NPR’s questions about the potential impact of its policy on future job and business creation in the U.S.
For those who previously benefited, the effect is personal. Cristina Foanene. whose glass company in Fresno. Calif. has received three SBA loans over a decade. said. “I don’t know where our business would be without this.” The money helped the company expand its showrooms and manufacturing facilities to make windows and doors.
Foanene and her husband moved permanently to the U.S. from Romania 20 years ago as investors, bringing with them hundreds of thousands of dollars to start their business. So far, they’ve hired some 30 people, with more planned. One employee recently retired after 19 years with the company.
Foanene said the first SBA loan made other investors more comfortable lending to her business.
Now, as the SBA tightens the gate, business owners are left asking what happens to the pipeline of deals when that first lender steps back.
“The alternative — it’s just really scarce,” Henries said.
That scarcity is where lawmakers say the harm may spread.
When SBA loans are no longer available under the new rules. private lenders may take longer to verify whether every owner meets citizenship requirements. Henries said. In the middle of underwriting, deals can stall. He pointed to clients who were already moving through the process—businesses that “employ dozens of people and generate revenue. and pay taxes”—only to see lenders “put the brakes on” after the rule change.
Even beyond delays, Henries worries the new policy could push some entrepreneurs toward riskier or predatory financing, including merchant cash advances. Some may not grow their companies. Some may not start them at all.
The SBA’s own reporting offered one measure of where it stood before the change: of all SBA loans last year, 4% went to businesses involving permanent residents. The share may sound small, but for the companies it helped, the loans were transformative.
For others, the transition is already reshaping who can be in the driver’s seat of growth.
Eight business owners who are legal permanent residents and had received or applied for SBA loans this year declined to speak to NPR on the record, for fear of drawing unwanted attention to their immigration status within the business community.
Foanene is different now. She became a citizen. She described the day she took the oath as one of her proudest moments, choking up as she said it.
Even so, she said she wonders whether leaders at the SBA might reconsider if they heard more stories like hers.
“It really made me sad,” Foanene said. “If they will understand that there are people that are coming here with honest intention of building a business and creating jobs, then I feel like maybe they will say, ‘Actually it is benefiting our country.’”
Congress is moving to counter the policy.
Similar concerns have some Democrats in Congress trying to reverse it. A group that includes Sen. Ed Markey of Massachusetts and Rep. Nydia Velazquez of New York. as ranking members of the Senate and House small-business committees respectively. introduced a bill to restore the eligibility of legal permanent residents for SBA loans.
For people like Tsuchitani. who built her business under the old system. the law now looks like a line drawn through years of work. She said the SBA “led me to my success of the American Dream. ” a statement rooted in what she did with the funding and what it enabled—before the eligibility rules were rewritten.
Whether Congress changes course or the SBA holds the line, one thing is already clear to owners caught in the transition: a loan that once opened doors is now closing them, and some businesses are learning that the timing of policy can decide who gets to keep growing—and who doesn’t.
SBA Small Business Administration immigration crackdown legal permanent residents green card small business loans Kelly Loeffler Maggie Clemmons Ed Markey Nydia Velazquez entrepreneurship merchant cash advances