Markey–Velázquez Letter to SBA on Immigrants (July 15, 2025)
- Issuer
- Congressional materials
- Document type
- 2025 07 15 Markey Velazquez Decry E To Sba Ranking Members Markey Velazquez Decry Extreme
- Date
- 2025-07-15
- Case
- 2025 07 15 Markey Velazquez Decry E To Sba Ranking Members Markey Velazquez Decry Extreme Sba Poli
Summary
A letter dated July 15, 2025 from Edward J. Markey, Ranking Member of the Senate Committee on Small Business and Entrepreneurship, and Nydia M. Velázquez, Ranking Member of the House Committee on Small Business, to SBA Administrator Kelly Loeffler. The letter objects to SBA changes that bar 7(a), 504 and Microloan financing for businesses with certain noncitizen owners, investors or key employees, and to the relocation of regional offices announced on March 6, 2025. It argues the loan changes depart from at least 25 years of agency guidance and cites a $2.5 million sale and a $5 million deal it says collapsed. It asks for written responses by July 29, 2025 to six numbered questions on SOP 50 10 8, enforcement, lender approvals, fair-lending and anti-discrimination law, and office relocation costs and impacts.
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July 15, 2025
The Honorable Kelly Loeffler
Administrator
U.S. Small Business Administration
409 3rd Street, SW
Washington, DC 20416
Dear Administrator Loeffler,
Through recent changes at the Small Business Administration (SBA), the Trump
administration is narrowing the path to economic opportunity for American entrepreneurs,
including immigrants. By restricting SBA loan access for certain noncitizen business owners and
employees, including those with legal immigration status, and by shuttering SBA field offices in
designated “sanctuary cities,” the SBA is telling immigrants: you are no longer welcome to
pursue the American dream. These extreme policies further threaten to undermine both local
economies and national growth. We write with questions about these ill-conceived changes and
urge you to reconsider them.
The SBA has arbitrarily amended its policies to the severe detriment of small businesses
owned or operated by immigrants. These policies will also hurt small businesses majority-owned
by U.S. citizens, U.S. nationals, and lawful permanent residents who want to partner with
immigrants. On June 1, 2025, the SBA implemented changes to its guidance document
governing two of its main lending programs: the 7(a) and 504 loan programs.1 One of the most
concerning policy changes announced by the SBA prevents 7(a) and 504 loans from going to any
small business whose owners, investors, or key employees have certain kinds of noncitizen
status. SBA made the same change for its Microloan program on April 17, 2025.2 These changes
were made to comply with the Executive Order 14159, which directed federal agencies to
“identify and stop the provision of any public benefits to any illegal alien not authorized to
receive them.”3 However, this policy harms even small businesses owned or operated by legal
immigrants, including individuals granted asylum, refugees, visa holders, recipients of Deferred
Action for Childhood Arrivals (DACA) status, and others.
This draconian policy change contravenes long-standing agency positions. Prior to this
change, the agency’s guidance—spanning at least 25 years and both Democratic and Republican
administrations—made SBA loans contingent on majority ownership of a small business by U.S.
citizens, U.S. nationals, lawful permanent residents, or, in some guidance documents, by those
“lawfully in the United States.” SBA has now flouted a quarter century of precedent by cutting
1 Lender and Development Company Loan Programs, U.S. Small Bus. Admin., https://www.sba.gov/document/sop-50-10-
lender-development-company-loan-programs.
2 SBA Policy Notice, Procedural Updates to Comply with Executive Order 14159 and new Eligibility Requirements for Obtaining
Microloans, U.S. Small Bus. Admin.
3 Exec. Order No. 14159, 90 Fed. Reg. 8443 (Jan. 29, 2025), https://www.federalregister.gov/documents/2025/01/29/2025-
02006/protecting-the-american-people-against-invasion;
Policy updates to comply with Executive Order 14159 regarding citizenship requirements for obtaining 7(a) and 504 loans, U.S.
Small Bus. Admin., https://www.sba.gov/document/policy-notice-5000-865754-policy-updates-comply-executive-order-14159-
regarding-citizenship-requirements-obtaining-7a-504.
Page 2
off access to critical loans for small businesses owned or operated—even in very small part—by
foreign nationals or certain immigrants with legal status.
The SBA’s guidance change is already causing business deals to fall through and cutting
off small business access to affordable capital. In one case, a $2.5 million sale collapsed because
a U.K. citizen who was set to become a U.S. lawful permanent resident had not held a green card
for the newly required six-month lookback period.4 In another instance, a $5 million business
deal collapsed because less than 2% of the business was foreign owned.5 The new, strict
requirements will, no doubt, cast a chilling effect on small businesses across the country—small
business owners will think twice before seeking out an SBA loan, hiring or promoting legal
immigrants into managerial roles, or accepting investments from noncitizens. In particular, these
policies will hamstring businesses and industries that rely predominantly on immigrant labor,
including food services, agriculture, and construction.
Importantly, SBA’s policy changes are a solution in search of a problem and appear to
stem from the notion that certain groups are receiving SBA 7(a) and 504 loans when they
otherwise shouldn’t be. Our committees have never seen any evidence, credible or otherwise,
that meaningful numbers of individuals in the United States without legal authorization are
receiving access to SBA financing.
On March 6, 2025, the SBA announced it will relocate six regional offices currently
situated in Atlanta, Boston, Chicago, Denver, New York City, and Seattle.6 On June 7, 2025,
SBA added Los Angeles to the list.7 The SBA is eroding the trust of small business owners by
politically targeting the relocation of regional offices in these major metropolitan areas, in which
almost 18 million people and 7 million small businesses are located.8 Small businesses deserve
to have SBA meet their needs where they are. Instead, the SBA has doubled down on this
troubling policy by endorsing legislation that would remove all field resources, not just regional
offices, from so-called “sanctuary jurisdictions.”
To be clear, we firmly believe that our cities should be safe, all acts of violence should be
taken seriously, and violent crimes should not be tolerated. However, the Trump administration
has made clear that its policies are not aimed at improving public safety or targeting individuals
with criminal backgrounds. Instead, this Administration is playing political games with people’s
livelihoods and, once again, recklessly failing to consider the interests of small businesses.
4 Brandon Kochkodin, Small Business Administration Rule Changes, Forbes (May 20, 2025),
https://www.forbes.com/sites/brandonkochkodin/2025/05/20/small-business-administration-rule-changes/.
5 Lydia DePillis, Under Trump, a Mainstay for Small Businesses Clamps Down, N.Y. Times (May 23, 2025),
https://www.nytimes.com/2025/05/23/business/economy/trump-small-business-administration.html.
6 News Release, U.S. Small Bus. Admin., Administrator Loeffler Announces SBA Reforms to Put American Citizens First (Mar.
6, 2025), https://www.sba.gov/article/2025/03/06/administrator-loeffler-announces-sba-reforms-put-american-citizens-first.
7 Kelly Loeffler (@SBA_Kelly), Twitter (June 7, 2025, 6:05 PM),
https://x.com/SBA_Kelly/status/1931472723424800771?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E193
1472723424800771%7Ctwgr%5Eed5218fbe37991681512844daa090b5669d6fb7a%7Ctwcon%5Es1_&ref_url=https%3A%2F%
2Fwww.foxbusiness.com%2Fpolitics%2Ffederal-agency-leaving-los-angeles-over-democratic-mayor-siding-illegal-aliens-over-
law-enforcement.
8 City and Town Population Totals: 2020–2024, U.S. Census Bureau (May 2025), https://www.census.gov/data/tables/time-
series/demo/popest/2020s-total-cities-and-towns.html#v2024; see also, Small Business Profiles for Major Metropolitan Areas
2023, U.S. Small Bus. Admin. Off. of Advocacy (July 11, 2023), https://advocacy.sba.gov/2023/07/11/small-business-profiles-
for-major-metropolitan-areas/.
Page 3
SBA’s loan-policy and office-closure decisions will unduly harm millions of small businesses
across the country that have been suffering through the chaotic, confusing, and unpredictable
economic policies of the Trump administration.
The combined loan-policy and office-closure actions are unacceptable and will hurt both
immigrant communities and the U.S. economy. Many of our immigrant neighbors are successful
entrepreneurs, managers, and investors—fostering innovation, creating employment
opportunities in local workforces, and addressing societal needs. Despite making up only 14% of
the U.S. population, immigrant-owned businesses account for almost 25% of businesses without
employees (i.e., sole proprietorships) and 19% of businesses with employees.9 According to the
Congressional Budget Office, higher rates of immigration in recent years are driving a $7 trillion
increase in gross domestic product and $1 trillion increase in government revenue over the next
decade.10 Immigrants also make up more than 19% of the U.S. workforce,11 filling critical
workforce gaps in key sectors such as healthcare and construction.12 Immigrant small business
owners employ millions of Americans and immigrant employees bolster small business
workforces, strengthening their local communities and supporting the U.S. economy.
To help us better understand the basis for and effects of the SBA’s loan policy changes and
closing of regional offices, please provide written responses to the following questions by
July 29, 2025:
1. Previous SBA guidance spanning at least 25 years allowed small businesses owned by
asylum recipients, refugees, visa holders, DACA recipients, and individuals with other
lawful immigration statuses to receive SBA loans. Since at least 2000, every iteration of
the relevant guidance document, Standard Operating Procedure (SOP) 50 10, has
required only that the majority of the business (i.e., 51% or more) be owned by U.S.
citizens, U.S. nationals, or lawful permanent residents (or others who were “lawfully in
the U.S.”).
Why has the agency deviated from a quarter century of precedent, including from policies
that the first Trump administration followed, in imposing a strict requirement that a small
business with certain noncitizens who own or operate—even in part—the firm are
ineligible for SBA loans? Please provide any research, memoranda, or other documents
on which the SBA relied in imposing the citizenship requirements for SBA loan
eligibility outlined in Standard Operating Procedures 50 10 8.
9 Nonemployer Statistics by Demographics series (NES-D): Owner Characteristics of Nonemployer Firms by Industry, Sex,
Ethnicity, Race, and Veteran Status for the U.S., States, Metro Areas, Counties, and Places: 2022, U.S. Census Bureau,
https://data.census.gov/table/ABSNESDO2022.AB2200NESD04?q=AB2200*&nkd=QDESC~O11.
10 Phil Swagel, Director’s Statement on the Budget and Economic Outlook for 2024 to 2034, CBO (Feb. 7, 2024),
https://www.cbo.gov/publication/59933.
11 News Release, U.S. Dept. of Labor Bureau of Labor Statistics, Foreign-Born Workers: Labor Force Characteristics—2024
(May 20, 2025), https://www.bls.gov/news.release/pdf/forbrn.pdf.
12 Immigrants in Healthcare, George Mason University Inst. for Immigration Research (June 2016),
https://iir.gmu.edu/archive-2017/iir-projects/healthcare; see also, U.S. Construction Industry Attracting More Immigrant Labor,
LBM Journal (Dec. 18, 2023),
https://lbmjournal.com/u-s-construction-industry-attracting-more-immigrant-labor/.
Page 4
2. SOP 50 10 8, states that a small business applying for an SBA loan may not have an
“ineligible person” serving as a key employee. The guidance defines a key employee as
“any person hired by the business to manage day-to-day operations.” SOP 50 10 8 also
states that “illegal aliens” may not be employees of the small business applicant.
a. How will the SBA be enforcing these requirements?
b. Does the SBA consider anyone in a managerial position to be a “key employee?”
Will the SBA be providing any further guidance on who it considers to be a “key
employee?”
3. SOP 50 10 8 also prohibits 7(a) lenders with delegated authority, which allows lenders to
approve loans on behalf of the agency with limited oversight, from having SBA expressly
approve certain loans through a non-delegated process. Delegated lenders, whose loans
constituted 80% of all 7(a) loan amounts in Fiscal Year 2024, used this process in certain
situations to get SBA’s assurance that they were making an eligible loan.
Does SBA have concerns that barring delegated lenders from having SBA expressly
approve certain loans will cause lenders to make ineligible loans or forgo making certain
loans altogether? How will SBA provide delegated lenders with assurance on the
eligibility of their loans, beyond an email inbox?
4. The Equal Credit Opportunity Act (ECOA, 15 U.S.C. 1691 et seq.) prohibits creditors
from discriminating against credit applicants on the basis of national origin and other
protected classes. The Immigration and Nationality Act (8 U.S.C. § 1324b) bars
employers from discriminating against an individual in hiring, firing, or recruitment
decisions based on an individual’s national origin or, in the case of protected individuals,
based on their citizenship status. Protected individuals under the Immigration and
Nationality Act include refugees and recipients of asylum.
a. Does the SBA’s policy change conflict with the ECOA prohibition on lenders
discriminating against applicants on the basis of national origin?
b. How is the SBA working with lenders to comply with SBA policy changes
without running afoul of ECOA?
c. Does the SBA’s policy change conflict with the Immigration and Nationality
Act’s anti-discrimination provisions?
d. How will the SBA ensure that its policies allow prospective borrowers to comply
with the Immigration and Nationality Act’s anti-discrimination provisions?
e. Does the SBA anticipate that its policy change will compel small business owners
to unduly discriminate against individuals in hiring, firing, promotion, or
recruitment decisions based on their national origin or citizenship status?
5. Please provide a detailed analysis of SBA regional office relocations, including:
a. dates of breaks in service to accommodate regional office moves;
b. service areas covered by the current regional office locations compared to the new
regional office locations, including population and number of small businesses
comparisons;
c. costs associated with regional office relocations including lease amounts, lease-
break penalties incurred, and employee relocation fees;
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d. mass transit comparison analysis for current and new SBA regional office
locations;
e. a summary of the data-driven criteria used to determine regional office
relocations, analysis to support the decision to relocate regional offices, and any
outcome-oriented goals and performance measures, if any, that will be used to
track the effectiveness of the relocations and ensure the agency is meeting its
mission;
f. a list of SBA’s district offices that may be impacted by these relocations;
g. the number of SBA employees affected by these relocations, along with a list of
employees by titles for each regional office, and any other office, affected by
relocations. For each individual, please indicate whether they were transferred,
terminated, or resigned;
h. the outreach and engagement, if any, that SBA has conducted with small
businesses in the regional office metropolitan areas to gain input on the proposed
relocations; and
i. the details, including names, titles, and experience of the dedicated
implementation team for relocations and a detailed description of the capacity
they have to manage the relocation process, including staffing and resources.
6. How will the SBA’s relocation of regional offices impact service to immigrant
entrepreneurs? What steps is the SBA taking to mitigate negative impacts to immigrant
entrepreneurs?
Cutting off access to SBA programs available to American entrepreneurs and small
businesses that employ immigrants will ultimately hurt local communities and weaken the U.S.
economy.
Sincerely,
Edward J. Markey Nydia M. Velázquez
Ranking Member, Senate Committee on Ranking Member, House Committee on
Small Business and Entrepreneurship Small Business
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