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Of all the states, California is home to the most small businesses and has the largest immigrant population. But a recent rule change by the Small Business Administration could mean that the number of future owners of California restaurants, child care businesses, law practices, nail salons and other businesses would decrease significantly.
As CalMatters’ Levi Sumagasai explains, in March the SBA began restricting access to its loans to U.S. citizens and residents only. Green card holders no longer qualify for loans, as do businesses that are only partially owned by a legal permanent resident with a green card. SBA-backed loans from private donors, which provide loans to people banks might consider riskier, have also been off the table since April.
Maggie Clemons, an SBA spokeswoman, said in an email that the agency has limited lending capacity and that the new policy “will help ensure that more American citizens have access to financing previously provided to non-citizens.”
But SBA loans are critical to immigrant entrepreneurs because of their typically low interest rates and are available to those without an established credit history. Forty percent of California’s business community is made up of immigrant entrepreneurs, and in 2023 they generated $28.4 billion in revenue. The rule change could affect about 220,000 small business owners in California who hold green cards.
Two decades ago, Cristina Foanene came to the U.S. from Romania on a green card and received an SBA loan in 2018. The loan allowed her and her husband to start a glass company in Fresno that now employs 30 workers.
- Foanen: “The loan has allowed us to create more jobs, make an even bigger impact in our community… It literally breaks my heart. There are so many good people with good intentions. I feel it’s unfair.”
Join us in Fresno Wednesday at 5:30 p.m. to hear the gubernatorial candidates address the issues most important to the Central Valley. Register now for the Central Valley Governor’s Forum moderated by CalMatters.
Join CalMatters on April 22 in Pasadena for a conversation on recovery from the devastating wildfires in Los Angeles in January 2025. Experts will explore how labor shortages are shaping recovery efforts and what it will take to strengthen the flow of skilled trades. Register today.
Be part of the conversations driving California forward at the CalMatters Festival of Ideas on May 21 in Sacramento. Get your tickets now.
Other stories you should know
A friend, not a friend of the court
After a CalMatters investigation revealed that a Ventura County fiduciary funneled client money to her husband’s law firm and health care company, a district judge has begun the process of resolve the woman’s business conflictswrites Byrhonda Lyons of CalMatters.
For years, Angelique Friend employed her husband, David Esquibias, as her attorney and his home health care company to provide care for her elderly clients. A friend’s clients often foot the bill for these services, and while the court is aware of the couple’s relationship, the California Professional Trust Bureau generally prohibits such conflicts of interest.
The district judge ordered Friend to stop hiring both Esquibias as her attorney and his health care company. The judge also blocked Esquibias from collecting attorneys’ fees in three cases and removed Friend as trustee in a fourth case.
At the hearing, Esquibias expressed shock that his working relationship with Friend had now become an issue, given the court’s approval of it for years.
A new role for the state in construction?
Among the many bills recently introduced to encourage manufactured housing in California, one stands out for its unprecedented proposal the state immerse yourself in a new roleCalMatters’ Ben Christopher reports.
The bill would have the state become a reinsurer for developers and lenders interested in building factory homes. Because these houses take less time to build and are built under safer working conditions, they are cheaper to manufacture and ultimately more affordable to buy. But construction in general is a risky venture, and factory construction even more so.
By allowing the state to insure insurers — stepping in to cover part of the payout if a project fails — the bill aims to make insurance companies more willing to offer insurance. Developers will theoretically be more encouraged to connect with factories, which will give factories a more stable business.
But questions remain, including how much it might cost taxpayers and whether other lawmakers have enough faith in the fledgling industry to support the bill. The measure is expected to be heard in the committee at the end of April.
And finally: The tax returns of the gubernatorial candidates
California’s top gubernatorial candidates have released their tax returns, giving voters a peek at their earnings and income. Among the key highlights: Democrat Tom Steyer, a billionaire former hedge fund manager, and his wife reported a combined income of $39 million in 2024 — more than all nine of his primary opponents and their partners made that year combined. Read more by Yue Stella Yu at CalMatters.
California voices
CalMatters columnist Dan Walters: New manufactured housing complex in Santa Monica highlights housing opportunities and obstacles posed by recent package of bills related to modular housing.
CalMatters contributor George B. Sanchez-Tello: Sudden shutdown of Monterey County mental health center, in part due to local pushback, highlights California shortage of housing programs.
With sky-high gas pricesrefinery closings and California’s reliance on imports, state regulators should reconsider their proposal to update the state’s cap-and-trade program, writes state senator Tony StricklandRepublican from Huntington Beach.
Other things worth your time:
California Rep. Swawell blames Trump trying to sway the California governor’s race with old FBI files // Los Angeles Times
The California governor’s race has no frontrunner — but a lot of money // San Francisco Chronicle
Riverside County Sheriff’s Office investigation that over 650,000 seized ballots are “withheld” // The San Bernardino Sun
Legislators in CA are considering requiring draggers of all vehicles of DUI offenders // The Orange County Register
After the increasingly costly wildfires in CAnew study may shape state response // The Press Democrat
The federal provision protects the state of California from loss of funds in a Title IX dispute // EdSource
Inside the mountain complex in California led by Cesar Chavez // New York Times
Next to Joshua Tree National ParkAustralian mining company stakes its claim on rare earth minerals // Los Angeles Times
Vendors are gearing up for thousands of San Diegans to Lose SNAP Benefits // San Diego Union Tribune
