US Senator Ed Markey this week sent a letter to the US Small Business Administration’s top executive, accusing the agency of playing politics and hampering immigrant access to its loans.
Markey, the ranking member of the Senate committee on small business, sent the letter to Administrator Kelly Loeffler; it was cosigned by his counterpart in the House, Nydia Velázquez of New York. The primary issue they raised in questions to the SBA: changes that took effect last month to two loan programs, known as the 7(a) and 504 programs, in which the SBA backs portions of loans to small-business owners, to help encourage bankers to lend to them.
Markey and Velázquez wrote that in the past, including during the first Trump administration, immigrants could access these loans as long as the business was at least majority owned by a US citizen or a green card holder. Now, these loans cannot be made if the small business has any investors or key employees with certain kinds of “noncitizen” status such as those granted asylum or visa holders. The new edict will “cast a chilling effect,” they write, on small-business owners who may rethink applying for an SBA loan, accept investments from noncitizens, or hire or promote certain legal immigrants into managerial roles.
The SBA took this move in response to an executive order from President Trump to stop providing public benefits to illegal immigrants, though the two Democrats write that the SBA decision harms many small businesses owned or operated by legal immigrants.
Markey said it’s important for the SBA to explain why it’s making these changes.
“There is no evidence that this is a program that’s been abused at all,” Markey said in an interview. “This is a system that has worked well for generations. As part of Trump’s casting a shadow over immigration, they’re really going to cause serious harm to immigrant entrepreneurship in our country.”
The two Democrats also asked the SBA to outline the impacts from the decisions to relocate regional offices in seven cities, including Boston, because the administration deemed them to be so-called “sanctuary cities.” Among other things, they want to know what kind of impact these office relocations have on SBA services for immigrant entrepreneurs.
Representatives for the SBA did not provide a response to the letter when asked by the Globe on Tuesday. Markey has asked that the SBA respond to the questions in his letter by July 29.
“We have not been presented with any evidence that would justify such a fundamental change in policy,” Markey said. “To the extent to which the Trump administration is playing political games with people’s livelihoods rather than sustaining their livelihoods, we want to give them an opportunity to explain what their rationale is.”
Jon Chesto can be reached at jon.chesto@globe.com. Follow him @jonchesto.
