The House has passed legislation that would ward off noncitizens from receiving Small Business Administration loans, bringing agency-driven SBA policy shifts from earlier this year a step closer to codification into law.
The bill passed Friday 217-190, with eight Democrats joining all Republicans in voting for it. If passed by the Senate and signed by President Donald Trump, the legislation would require applicants for SBA loans to submit documentation proving their citizenship status.
“We cannot allow those kinds of folks that are in our country illegally to take money away from hardworking Americans who are applying for SBA taxpayer-backed loans,” Rep. Beth Van Duyne (R-Texas), a sponsor of the legislation, said on the House floor.
Democrats countered that Republicans have shared no evidence that SBA loans are being distributed among business owners who are noncitizens.
“Let’s be honest about what this bill really does: It uses small business policy as a vehicle for immigration politics,” said Rep. LaMonica McIver (D-N.J.). “That is not only misguided — it’s harmful.”
The Trump administration rolled out a rule in recent months to block noncitizen business owners from borrowing money from the SBA. It came about after an audit uncovered the agency had approved in June 2024 an SBA loan of $783,000 for the owner of a small business that was partially owned by someone without citizenship status.
The House passed another bill Thursday afternoon that would relocate local SBA offices from so-called sanctuary cities to jurisdictions that comply with federal immigration enforcement.
