Foreign Nationals Are Good for Business
For immigrants and the brokers who serve them, America is the land of opportunity
By Garry Barnes
Garry Barnes is a director of P W Partners Consultancy.
He’s a former bank CEO and president who currently serves
on the board of directors of Holladay Bank & Trust in Salt
Lake City. He taught at the university level, is a writer and
lecturer on banking and real estate matters, served on
the U.S. Small Business Administration’s National Advisory
Council and was an in-country consultant to the Central
Bank of Russia. Reach Barnes at (619) 791-9403 or
These three countries accounted for almost 14 percent
of all of the foreign born in the U.S., while immigrants
from South and East Asia combine to represent about
27 percent of all immigrants living in the U.S.
On another front, according to research reported in
Forbes, immigrants are important contributors to the
U.S. innovation economy. An estimated 25 percent of
U.S. patent filings are made by immigrants, according
Immigrants to the U.S. also create businesses at a high
rate, research from the National Bureau of Economic
Research (NBER) shows. According to a 2018 paper
submitted to the NBER, about 25 percent of new companies launched in the U.S. were started by first-generation
American immigrants, and that share exceeds 40 percent
in some states.
In addition, Forbes reports, based on research by the
National Foundation for American Policy, more than half
of U.S. startup companies valued at $1 billion or more
( 44 of 87 such companies) were launched by immigrants.
And some 70 percent of these startup companies have
key management or product-development employees
who are immigrants.
The number of self-employed foreign-born residents in the U.S. increased 4. 6 times over the 30 years
ending in 2000 — from about 314,000 to more than
1.4 million, according to U.S. Census Bureau data. As
of 2015, an American Immigration Council analysis
of census data shows that number had jumped to
3. 3 million immigrant business owners, representing
more than 20 percent of all self-employed U.S. residents.
Their companies generated business income of
$72.3 billion. These numbers represent a large potential
source of business for the knowledgeable and motivated
commercial mortgage broker who has the skills to
develop a market specialty.
In all lending markets, knowledge and under- standing are critical to the offering of a specific product or service. In some cases, the process becomes more challenging and greater insight is
required, such as in the case of lending to borrowers
who are immigrants.
Are there lending and borrowing options available for
United States residents who are not American citizens?
The short answer is yes. It should be remembered that
every case is different but, in general, foreign-born borrowers will need to confirm that they have a consistent
source of income, an established credit score, a valid
Social Security number and an eligible work visa.
Not every lender offers this type of loan program
because of the many complexities involved and the lack
of understanding of special needs associated with
providing loans to foreign nationals. Of course,
portfolio underwriting requirements will differ from
lender to lender.
The U.S. has been the top destination for international
migrants since at least 1960, with one-fifth of the
world’s migrants living here as of 2016. Even more than
before, immigration is tied closely to discussions about
the U.S. economy and global competitiveness, national
security and the country’s role in humanitarian protection
at a time of record global displacement.
More than 43. 7 million immigrants resided in the
U.S. in 2016, accounting for 13. 5 percent of the total
U.S. population of approximately 323 million, according to American Community Survey data. That figure
jumped by 3. 8 million people compared with 2010.
The increase in immigration is significant and seems
to reflect continued growth after immigration slowed
substantially during the recession. This expanding
market indicates a growing opportunity for commercial mortgage brokers with the appropriate skills and
interest for tapping into this population.
Immigration has a profound impact on the U.S.
Throughout its history, this country has been a destination for migrants from across the globe. Immigration
touches on myriad facets of American life — including
economic, political and cultural characteristics.
The visa challenge
A visa is an endorsement or stamp on a passport indicating that the holder is allowed to enter, leave or
stay for a specified period of time in the U.S. Although
there are nearly 185 different types of visas, there are
two main categories.
The first is the non-immigrant visa, which is for people temporarily entering the U.S. for tourism, business,
work or study. Non-immigrant visa status restricts the
activities and reasons for which one is allowed entry.
For clarification purposes, the H-1B visa is an
employment-based, non-immigrant visa for temporary
workers. To be eligible for this visa, an employer must offer
a job to the individual and apply for an H-1B visa through
U.S. Citizenship and Immigration Services (USCIS).
The second category is the immigrant visa, which is
issued to a person wishing to live permanently in the
U.S. The terms “green card” and “immigration visa”
are synonymous and are used interchangeably. Green
cards are valid for 10 years for permanent residents,
and two years for conditional permanent residents. After
this period, the card must be renewed or replaced.
Of course, not all immigrants meet the basic eligibility or lending requirements of certain lenders or
specific government-sponsored programs. The first
step in the qualification process is to understand the
U.S. government’s visa standards, which will be key to
confirming that the potential borrower has the legal
right to be in the U.S.
From many lands
Approximately 26 percent of immigrants in the U.S.
arrived from Mexico. The other top countries of origin, as
of 2017, were China, India and the Philippines, according
to the United Nations and the Pew Research Center.
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At a Glance
Companies owned by
immigrants may be eligible
for SBA financing, if they are:
n Assurance that managers of the business are expected
to stay in place, and they have U. S. citizenship or
verified lawful permanent-residence status.
n Management also must have operated the business for
one year prior to the date of the SBA-loan application.
n A personal guaranty is required.
n The SBA-loan applicant must pledge collateral sufficient
to repay the loan in full at any time during its life.
1. Businesses owned by legal permanent residents
or green-card holders.
2. Businesses owned by legal nonpermanent
residents, if the following conditions are met:
Most commercial mortgage brokers will not be surprised to hear that foreign
nationals represent a significant market opportunity within real estate finance.
Brokers may not know, however, that undocumented foreign nationals offer the
best potential for lucrative deals. ✪ These undocumented borrowers, which
include foreign investors, have some key characteristics that create much better
business prospects for brokers. They represent a population that is nearly as
large as that of documented foreign nationals and, because they are perceived to
be more challenging and riskier to work with, the majority of institutional lenders
will not consider providing financing to them — especially because lending
requirements have tightened since 2008.
✭ UNDOCUMENTED BORROWERS, IN PARTICULAR, NEED TO SEEK OUT SPECIALIZED FINANCING ✭
Lawrence S. Brown