Ranking Member Edward J. Markey, House Small Business Committee Ranking Member Nydia Velázquez, Congressional Black Caucus Chair Yvette Clarke, Congressional Hispanic Caucus Chair Adriano Espaillat, and Congressional Asian Pacific American Caucus Chair Grace Meng have criticized a new Small Business Administration (SBA) policy that requires small businesses seeking SBA loans to be 100 percent owned by U.S. citizens or nationals. The lawmakers sent a letter to SBA Administrator Kelly Loeffler urging the agency to return to previous lending standards.
The SBA’s Policy Notice 5000-876441, issued on February 2, prohibits 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 present in the country. A subsequent notice on February 11 provided further details about these requirements. This is the fourth change regarding citizenship rules since March 2025.
The lawmakers stated that this policy would restrict access to capital for small businesses already facing economic challenges under current administration 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.
They argued that there is no sound lending reason for this new requirement and warned it could harm both small businesses and their communities by limiting job creation and economic growth.
Additionally, they expressed concern that lenders will face new compliance burdens as they must verify the citizenship status of all direct and indirect owners. These added costs might lead lenders to avoid working with businesses that have complex ownership structures.
“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 called for reversing this policy change:
“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 has been active in advocating for immigrant entrepreneurs’ ability to secure SBA loans. Earlier in February, he joined Ranking Member Velázquez in condemning similar actions by the SBA barring legal permanent residents from receiving loans. In December 2025, Markey led Democratic members of the Senate Small Business Committee in expressing concerns over these requirements after observing a decline in lending volume; so far, there has been no response from the agency.
In September 2025, Markey heard directly from lenders about difficulties related to verifying citizenship status for borrowers. In July 2025, he joined Velázquez again in sending a letter criticizing what they described as “draconian” verification requirements—again without response from SBA leadership.
The Senate Small Business and Entrepreneurship Committee plays an important role by supporting informed decision-making on fiscal priorities through oversight activities such as providing nonpartisan budgetary analysis via its supervision of the Congressional Budget Office (official website). The committee also offers Congress comprehensive policy options regarding federal budget components (official website), contributes resolutions during congressional budget processes (official website), was established through legislation passed in 1974 (official website), and currently features Lindsey Graham as chairman with Jeff Merkley serving as ranking member (official website).
