After years of working as a hairdresser in New York, getting an employment-based green card was Sayuri Tsuchitani’s first huge leap toward the life she wanted in the U.S. 

Getting a $100,000 loan from the Small Business Administration as a newly minted permanent resident was her second.

The Japanese-born Angeleno had always harbored entrepreneurial ambitions. As a newcomer to the U.S. in the late 1990s, she put herself through beauty school and styled her way up to leading salons. 

For a long time, working for herself and building a business from the ground up seemed out of reach – until her green card unlocked the secure, low-interest capital she needed to start a brick-and-mortar Japanese head spa in Beverly Hills.

“The loan led me to my American dream success,” Tsuchitani said. 

For L.A.’s vast community of immigrant entrepreneurs, the SBA has been a lifeline and a path to meaningful growth and opportunity in the U.S. Since the 1950s, the federal agency has helped small business-owners – including those without an established credit history – access capital by guaranteeing loans through partner lenders.

In light of a federal policy shift implemented in March, companies wholly or even partly owned by green cardholders like Tsuchitani no longer qualify for SBA’s loan products. The change stands to hit business hard in L.A., where more than half of all business-owners were immigrants as of 2019.

Brian Pifer, who leads innovation at the national Small Business Majority and advocates for L.A.’s small business-owners, said the policy will hurt job creation and local economic growth. 

“If businesses don’t have access to reputable, low-cost financing options like those that the SBA provides, they still need capital. That need hasn’t gone away,” Pifer said. “If they get funneled into a product that’s going to cost them more money and interest, it’s going to harm their ability to grow the local economy.”

Impact of the pandemic

During the Covid-19 pandemic, when the social distancing restrictions temporarily shuttered the salon that she worked at, Tsuchitani received an SBA Economic Injury Disaster Loan. The funds, financed at a 3.5% interest rate over 30 years, allowed her to grow Head Spa EN, her then-fledgling business, into an L.A.-area chain with three locations. 

Without the loan, Tsuchitani – who sold the spa business in 2024 and has since founded Sumo Yoga, a yoga mat retailer – said she’d have likely been a hairdresser her whole life. Without the breathing room and the opportunity that the funding gave her, she isn’t sure she’d have been able to ever retire.

“It’s just going backwards,” Tsuchitani said of the new eligibility restriction, which followed a sweeping re-organization of the SBA by President Donald Trump’s administration.

The agency cut its headcount by 54% last year, eliminated diversity initiatives and introduced the “Made in America Loan Guarantee,” which incentivizes lending to U.S. manufacturers and supply chain-related businesses.

Nationally, businesses owned by non-citizen borrowers received 3,358 loans in the 2025 fiscal year, an SBA representative told CalMatters, accounting for roughly 4% of the 85,000 total loans the SBA greenlit.

Lending support

When news of the policy change hit, one of L.A.’s top SBA lenders, Minneapolis-based U.S. Bank, quickly took action to arrange loans for the non-citizen borrowers in its pipeline before eligibility tightened in early April.

“We identified who would be impacted when the change took place,” said Erik Daniels, the bank’s head of SBA lending, “and then we worked closely with them to make sure that we were able to gather everything that we needed to clear all conditions in order to get their SBA loan number.” 

At downtown-based City National Bank, where the new rule impacted many loans in progress and potential borrowers, bankers redirected business-owners to alternative financing. This includes conventional, higher-interest products for borrowers with some financial flexibility and state-sponsored options, said Sam Benedum, head of business banking.

“The partnership with small business finance centers in the California Small Business Loan Guarantee Program has been the bridge for many of those borrowers at City National Bank to proceed with their lending requests,” Benedum said.

Jacky Dilfer, executive director of downtown-based SBA lender Business Finance Capital, said that while she believes the Trump administration “wants to support the entrepreneurial spirit,” its new citizenship requirement is an unfortunate change that will limit opportunities for hard-working, foreign-born entrepreneurs. 

“The immigrant community really represents a very large percentage of many lender portfolios,” Dilfer said, “and it will be a huge loss, not only to lenders, but also to these legal permanent residents that are trying to live the American dream.”

“We hope to see a change in this policy in the near future.”