Ranking Member Markey Leads Senate Democrats Requesting Answers from SBA on Draconian Immigration Policies

SBA policy changes have led to a 46% reduction in small business lending

Letter Text (PDF) | One-Pager

(Washington, December 18) - Ranking Member Edward J. Markey (D-Mass.) led 18 of his Democratic colleagues, including every Democratic member of the Small Business Committee, today in writing to Small Business Administration (SBA) Administrator Kelly Loeffler, requesting answers about the Trump administration's efforts to limit economic opportunity for American entrepreneurs, including immigrants, and highlighting the damage that the SBA's draconian citizenship verification requirements are doing to SBA lending programs.

These new requirements, implemented in June, prevent loans from going to small businesses whose owners, investors, or key employees are foreign nationals; have deferred action, such as recipients of Deferred Action for Childhood Arrivals (DACA); or have certain kinds of lawful noncitizen status, including refugees, asylees, visa holders, and conditional green card holders-even if the business is majority owned by U.S. citizens. SBA's policy changes, which include the citizenship verification requirements, increased minimum credit scores, and more stringent underwriting requirements, have contributed to a drastic 46% drop in small business lending from June to August 2025.

In July, Ranking Members Markey and Nydia Velázquez (NY-07) sent a letter to Administrator Loeffler with concerns regarding SBA's severe citizenship requirements, to which the SBA has yet to respond.

In the letter, the lawmakers write, "These new requirements hurt any small business owned or operated even in small part by noncitizens, even when the business employs Americans and operates wholly in the United States. Small businesses use SBA loans to create jobs and invest in their operations. Unfortunately, the Trump administration is demonizing immigrant communities and picking winners and losers, rather than basing lending decisions on a small business's ability to repay a loan."

The lawmakers continue, "We have heard concerns that these requirements unduly bar small businesses with certain lawfully present, noncitizen owners and employees from receiving financing. For example, entrepreneurs stand to lose eligibility for SBA loans if they accept a small amount of start-up funding from friends or family members who aren't U.S. citizens. Despite the Trump administration's solicitation of foreign investment in the United States, small businesses with even one percent of foreign ownership can no longer receive an SBA loan. In some instances, businesses that previously received SBA loans have lost eligibility solely based on these new requirements. Lenders have informed us that borrowers may not even bother applying due to confusion or fear around the new requirements."

The lawmakers conclude, "We urge the SBA to restore its policy of allowing SBA financing for businesses that are majority-owned and controlled by U.S. citizens, nationals, and lawful permanent residents…Without changes, the SBA's draconian citizenship verification requirements will continue to hurt small businesses, local communities, and the U.S. economy."

The lawmakers request responses by January 8, 2026, to questions, including:

• How many small businesses applying for SBA financing have been denied a loan because of the new citizenship verification requirements?

• What has SBA communicated to its lenders about complying with these requirements and when will the agency update relevant borrower forms?

• Why has SBA made individuals with lawful immigration statuses, including several protected classes under the Immigration and Nationality Act, ineligible for SBA loans?