Policy changes at the Small Business Administration limiting the kind of people who are eligible for its loan programs will result in fewer business loans issued across the state, said Raymond Lanza-Weil, president of Common Capital.
The SBA announced last week that all the owners of businesses applying for its loan programs must either be citizens or U.S. nationals. The change is scheduled to go into effect March 1.
Raymond Lanza-Weil is president of nonprofit small-business lender Common Capital. (Jim Kinney / The Republican, File)The Republican
"I'm confident that it will reduce all of our loan volume, because of the number of legal permanent residents that are entrepreneurial and trying to get loans to support their businesses and create jobs in our local communities," said Lanza-Weil.
With a focus on Western Massachusetts, Common Capital works with entrepreneurs who are often striking out on their own, or businesses in their first few years of operation. These kinds of business owners often struggle to acquire funding from a traditional bank.
Of the approximately 130 people who have received funding from Common Capital, a handful had green cards at the time they were issued their loans, Lanza-Weil said.
The Small Business Administration moved to prevent green card holders from eligibility for loans. (Douglas Hook / The Republican)Douglas Hook
"If those folks apply for another loan from us next month," Lanza-Weil said, "or if somebody like them comes to us for a loan next month, even though they're here legally documented, living and working and supporting their families and supporting our economy, they can't get an SBA-related loan from us or anybody."
One of the SBA's key loan programs, called 7(a) , guarantees business loans given out by a bank or other lending institution, helping them issue loans they otherwise might be unable to make. Common Capital is one of the top lenders participating in the 7(a) loan program in Western Massachusetts, according to data compiled by the SBA.
When it comes to community loan funds like Common Capital, it is believed that about 5% to 10% of their portfolios are made up of entrepreneurs with green cards, according to Lanza-Weil.
The SBA did not return a request for comment about the policy change.
U.S. Sen. Edward J. Markey arrives at Bright Nights at Forest Park's opening night in November. (Leon Nguyen / Special to The Republican, File)(Leon Nguyen / Special to The Republican)
Last week, U.S. Sen. Ed Markey, who is the ranking Democrat on the Senate Committee on Small Business and Entrepreneurship, criticized the policy change, saying it spread confusion and fear while fostering hatred.
"The administration's message to immigrants is clear: You are not welcome to pursue the American dream," their statement said.
Markey issued the statement along with U.S. Rep. Nydia Velázquez, D-New York, who sits on a House committee on small business.
In December, Markey sent the SBA a letter signed by 18 of his Democratic colleagues in the Senate. The SBA made a move in June to restrict certain lawful residents such as refugees from its programs, which played a role in a 46% slowdown in lending between June and August, Markey's letter said.
"Without changes, the SBA's draconian citizenship verification requirements will continue to hurt small businesses, local communities and the U.S. economy," the letter states .
Markey's letter asked the SBA to answer a series of questions about the policy change. Last week, his office said in a statement they did not receive a reply.
Read the original article on MassLive . Add MassLive as a Preferred Source by clicking here .
