The Small Business Administration has stopped offering government loans to the networks of ethnic E-2 migrants who elbow American citizens out of opportunities to buy businesses or lease franchise hotels, gas stations, and retail stores.
The agency had granted loans to more than 3,300 migrant-owned businesses in 2025, allowing migrants to win bigger loans and mortgages from other banks. But the agency will now only help citizens as they compete for franchises and launch businesses throughout the United States.
“The Trump SBA is committed to driving economic growth and job creation for American citizens,” SBA Administrator Kelly Loeffler announced on March 9, adding:
Last month, we made it clear that SBA would not allow foreign nationals to access our core small business loan programs – and today, we are expanding that policy to include all SBA-guaranteed loans. With our lending authority capped annually by Congress and amid record demand for access to capital, our responsibility is clear: the limited resource of SBA financing must prioritize American citizens who are building businesses and creating jobs here at home.
In Fiscal Year 2025, SBA approved 3,358 loans for small businesses owned in part by a lawful permanent resident (LPR), largely during the Biden Administration – representing 4% of the agency’s total 85,000 loans approvals.
The E-2 Treaty Investor Visas are given to migrants who can show they have a plan to grow wealth and employment in the United States. Many types of business projects are eligible. The migrants are allowed to bring in employees — including people who will work for very low wages — plus people they describe as “family members.” Roughly 1 in 11 visa applicants are rejected.
Many migrant-operated businesses gain a marketplace advantage over individual American entrepreneurs by colluding within ethnic or caste networks, or by committing economic fraud or visa fraud, as is common in their home countries.
Democrats are protesting the pro-American reforms.
“The Trump SBA is choosing hatred by barring green card holders from receiving an SBA loan. The message to immigrants is clear: you are not welcome to the American Dream,” top House Democrats said in a February 2 letter to the SBA.
“The Trump administration is demonizing immigrant communities and picking winners and losers, rather than basing lending decisions on a small business’s ability to repay a loan,” top Democrat senators said in a December letter to the SBA.
The number of E-2 visa awards spiked under President Joe Biden. The federal government approved roughly 54,000 in 2024, up from roughly 40,000 per year before the coronavirus crash. The visas last for 5 years, so the number of migrants with valid E-2 visas may be above 200,000. If each business operation includes 6 people, then visas could keep more than 1 million foreigners in the United States, where they are free to use U.S. schools, hospitals, and other resources.
But the cutoff of SBA loans will make it more difficult for migrants to move into the United States.
“SBA loans provided foreign entrepreneurs with access to low-interest, government-backed financing to purchase existing businesses or launch new ones,” according to Visa Business Plans. “These loans were often used in E-2 visa cases and other business-based immigration strategies.”
The SBA’s change “means the deal structure will look different, and will require more creativity,” according to Biz Buy Sell.
Japanese applicants are the leading nationality in the program, followed by France and Canada. However, the Canadian number is rising fast because it includes many Indians who have first acquired Canadian citizenship. India is not registered for the program, so Indians must first find citizenship in other countries.
Law firms describe some of their clients:
The first client we will discuss is a client from Pakistan. He was actually in the United States on a visitor visa. While he was in the United States visiting, he decided that he wanted to operate a business in the US. So, after doing some research, he came to learn about the E2 visa. That led him to begin thinking about the kind of business he could start in the U.S. He eventually decided that he wanted to start a cell phone repair business.
Our client was fortunate enough to have an uncle in the United States who was a lawful permanent resident. His uncle helped him a lot with this process, actually gifting him a substantial amount of the funds that he would then use to invest in his E2 business. Our client received the remaining funds he needed for his E2 investment from his mother, also in the form of a gift.
In 2019, the Government Accountability Office warned that the program was a fraud risk.
Many of the roughly 3,000 franchise firms lease operating licenses to E-2 investors, partly because the migrants can tap into the vast pool of illegal-migrant labor in the United States. Many E-2 migrants buy small-scale companies, such as a claimed remodeling business.
The visa is not a direct path to citizenship. According to the migration legal services group Alma:
The E-2 visa is a nonimmigrant category that does not directly lead to permanent residency. However, E-2 visas can be renewed indefinitely as long as the underlying business remains operational. E-2 holders who wish to pursue green cards typically transition through employment-based categories like EB-1C for multinational executives or EB-2 NIW based on their business achievements.
The similar E-1 visas are given to people who plausibly promise to increase trade between the United States and their home country. The E-1 also helps E-2 migrants to import people to work in the business.
However, the E-2 program has been going on for so long that migrants now own myriad hotels, gas stations, retail stores, and franchise operations. These numerous enclaves of foreign businesses have created their own ethnic associations, banks, and family networks, so giving migrants alternative sources of loans after the SBA reform.
For example, the government-backed Fannie Mae mortgage group helps Indian visa workers — such as people with H-1B or H4EAD documents — to buy homes that would otherwise go to Americans:
