Jack Stevens, Stephen Manydeeds, and David Johnson: Looming Budget Disaster!

Unless tribes push back hard, they are about to lose the half-century-old Indian Loan Guarantee Program (ILGP) and federal funding for renewable energy production.

On May 2, Trump Administration OMB Director Russell Vought announced massive program cuts in the FY 2026 budget for Indian Country. The loan guarantee program and green energy were casualties, the former because “it is duplicative of several other programs across the Federal Government that offer loans to small businesses and which tribal businesses are eligible for and receive,” and the latter because the administration wants to support fossil fuel development exclusively.

The ILGP has been in disarray, stumbling along under abysmal leadership since the start of the Biden Administration. As such, it was inevitable that it would become a target for elimination or absorption by the SBA. We warned of as much in our blog post of December 3, 2024. Still, the remedy for a program that has enabled well over $1.5 billion in needed financing for Indian economic development over its life span is a change of leadership, not the axe.

It would do well to remember that without the ILGP, there would be no tribal owed Hotel Santa Fe in downtown Santa Fe, no Indian Pueblo Cultural Center in Albuquerque, and no tourist facility and dock in Hoonah, Alaska, nor could the Navajo Tribal Utility Authority have acquired its wireless subsidiary, among many other landmark Indian projects.

The ILGP’s loss would be felt by every Indian struggling to obtain a bank loan to start or expand a business.

Several Native-owned banks and CDFIs have a high percentage of ILGP-backed loans in their portfolios. Deletion of the program could threaten their survival, too.

Please don’t be gulled into believing that SBA loans can ever replace the ILGP. The SBA insists that lenders liquidate defaulting borrower assets before paying a guarantee, which is a no-go for lenders who understand how complicated the world of foreclosure and asset collection can be on tribal lands. The SBA is so large that it necessarily takes a “one size fits all” approach to applications, and has no flexibility to consider superb, unique projects that may be unable to check every box SBA requires. The SBA doesn’t offer as high a percentage guarantee for most transactions. And the SBA is unaccustomed to the way most tribes arrive at decisions, let alone significant cultural influences, and it certainly isn’t used to dealing with political considerations on top of economic ones. SBA procedures are so dense and complicated that seasoned officials often can’t predict when or if a project will be approved.

In other words, SBA is inherently complicated and cumbersome, whereas the smaller operation the ILGP runs is far less opaque. The ILGP’s decisions come much quicker, and its personnel are much more available along the way.

Ninety-three percent of tribes possess no hydrocarbon resources. So, limiting federal funding to fossil fuel projects would effectively eliminate energy development for all but a few tribes. It also obviates sovereignty to have the federal government dictating what kind of energy tribes may generate.

The ILGP and green energy will vanish unless tribes en masse object, and a series of consultations planned by the BIA, starting May 20, may be good places to speak up: https://www.bia.gov/service/tribal-consultations/indian-affairs-workforce-efficiency-and-productivity-eo-14210-and