By any measure, small businesses are the backbone of our economy.

As an economics instructor, I teach my students that small businesses don’t just create jobs, they create stronger economies. They are how people move up, build wealth, and define their community. In places like Fresno, they are one of the most powerful engines of upward mobility and form the fabric of our city’s identity.

That’s why the recent policy shift by the U.S. Small Business Administration restricting loan eligibility to US citizens and nationals is misguided and economically reckless.

For more than 70 years, the SBA has been one of the most effective tools we have to help entrepreneurs get off the ground. Now, with the stroke of a pen, the Trump Administration has slammed the doors shut on lawful permanent residents starting up businesses.

They live here, pay taxes, and have spent years building toward the promise of starting something of their own. This change is wrong.

Let’s not sugarcoat this. A permanent resident who wants to open a restaurant, expand a construction company, or scale a manufacturing business just got pushed to the back of the line, or kicked out of it entirely.

Even worse, a business can now be disqualified simply because one of its owners isn’t a U.S. citizen. This is not an effective policy.

Washington, D.C. just does not seem to understand the basic formula for small business success: management, market access, and capital. You can have the best idea in the world and management knowledge, but without access to affordable capital, a business can suffocate. This policy change will cut off the oxygen needed to breathe life into new businesses.

A Direct Hit on the California Economy

This is a direct hit on California’s economy. Immigrants make up roughly 40% of the state’s entrepreneurs and own over 1 million small businesses. The California Office of the Small Business Advocate estimates 99% of net new jobs in the state are with small businesses. They generate hundreds of billions in economic activity and employ millions of Californians.

In the Central Valley, and especially here in Fresno, immigrant-owned businesses are overrepresented in industries that keep our local economy moving, ranging from agriculture to retail. These businesses are the supply chain that keep our economy moving and our residents employed.

As a Fresno City Councilmember, I have seen what happens when we get this right. I’ve seen immigrant entrepreneurs take a modest loan and turn it into a thriving business that employs dozens of people who rely on these jobs to support their families. They represent the American Dream in its most practical form, multiplying opportunity for all around them, and now we’re making it harder to achieve.

Don’t Cut Out America’s Most Motivated Entrepreneurs

Supporters of this new SBA policy argue it frees up lending capacity for American citizens, so let’s look at the numbers. The SBA approved roughly 85,000 loans in fiscal year 2025; only 4% went to businesses partially owned by lawful permanent residents. Four percent is not a capacity issue, it’s basically a rounding error. You cannot “fix” the system by cutting out the most motivated entrepreneurs in our economy, so let’s call it what it is: xenophobia and exclusionary economics.

Entrepreneurs don’t just disappear when you block access to responsible financing. People with dreams don’t just give up. Unfortunately, this means they turn to high-interest loans, informal networks, or predatory lenders.

This is not a new phenomenon, and predatory lenders know it. We’re not reducing risk, we’re shifting it into darker parts of the market where it’s harder to regulate and easier to exploit people.

Fresno, and California as a whole, understands something this policy gets fundamentally wrong: economic growth doesn’t come from closing doors. We must open doors for people with the willingness to bet on themselves and invest in our communities. Many of these people are immigrants who chose this country and are invested in its future.

We shouldn’t be making it harder for immigrant-owned businesses to succeed, we should be getting out of their way.

About the Author

Nelson Esparza is the Fresno City Council President and represents District 7. He is a candidate for the California State Board of Equalization, representing District 1. The district spans much of inland California, from San Bernardino County to the Oregon border, and encompasses 61% of California’s land area.

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