Members raise concerns that new SBA citizenship checks are blocking lawful small business borrowers
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Summary
Several members told the committee that a recent SBA verification policy is preventing lawful noncitizens or businesses with minority noncitizen owners from receiving guaranteed loans; the SBA said it is verifying ownership to prevent fraud and offered to work with lenders on implementation details.
Multiple members told the House Committee on Small Business that changes to SBA citizenship verification and ownership checks have caused lenders to delay or decline previously approved loans in cases involving lawful noncitizen owners or spouses.
Representative Tran and others described instances in which community lenders were unable to close loans for borrowers who include lawful, work‑authorized noncitizens or U.S. citizens married to noncitizens. "Turning away businesses or constraining small business growth because a non‑U.S. citizen owns a minority share in the company is just not right," Representative Cisneros said.
Thomas Kimsey replied that the SBA has implemented 100% ownership verification and that "verifying citizenship is very important" to prevent fraud and to know clearly who owns guaranteed loans. He said the Office of Capital Access has communicated with lending partners about the change and that the agency was receiving feedback.
Why it matters: Committee members warned that the policy, as implemented, could reduce access to credit in immigrant‑heavy and diverse districts and asked the SBA to provide guidance to lenders so approved loans do not get rejected at closing.
Kimsey said the SBA is following the eligibility language in its SOP and that the agency's guidance is found in SOP 50 10 8. Several members asked for expedited implementation guidance and appeals or exceptions where appropriate; Kimsey offered to work with members' offices and lenders to address operational issues.
Ending: Members requested lender‑by‑lender examples and data showing how many applications or closings were affected by the citizenship verification change, and they asked the SBA to provide clear written guidance to lenders to avoid unintended denials.