WASHINGTON, D.C. — Today, House Small Business Committee Ranking Member Nydia Velázquez (D-NY), Senate Small Business Committee Ranking Member Edward J. Markey (D-MA), Congressional Asian Pacific American Caucus Chair Grace Meng (D-NY), Congressional Black Caucus Chair Yvette Clarke (D-NY), and Congressional Hispanic Caucus Chair Adriano Espaillat (D-NY), sent a letter 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. The members wrote that the policy would limit access to capital as small businesses are already struggling under Trump administration 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 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. The members 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. For a full copy of the letter, click here. |