Sens. Cory Gardner (R-CO) and Chris Coons (D-DE) introduced legislation last week that would reduce fees and increase maximums on loans for small manufacturers through the Small Business Administration’s (SBA) loan guarantee programs.
The bill, entitled Investing in America’s Small Manufacturers Act, proposes to increase the maximum SBA guarantee and reduce fees small manufacturers pay on these loans. It also directs the SBA to assist small manufacturers with the application process to increase their ability to access credit.
Small manufacturers typically have limited access to cash reserves and often are challenged to secure credit through traditional lenders. While the SBA is designed to assist them in these efforts, for a variety of reasons, not enough small manufacturers have taken advantage of SBA services.
“The Investing in America’s Small Manufacturers Act makes it easier for small manufacturers to obtain loans that will enable them to hire and grow their workforce and boost local communities in Colorado and throughout the country,” Gardner said.
Small manufacturers create nearly half of all manufacturing jobs in the United States, Coons said.
“This bill will help increase the availability of affordable capital to small manufacturers, which will allow these companies to expand operations and create new jobs,” Coons said. “Support for manufacturing is bipartisan and a policy area where Congress and the Administration can find common ground.”
Robert Atkinson, president of the Information Technology and Innovation Center, said bolstering the manufacturing sectors is critical to improving U.S. economic competitiveness. Small manufacturers play a significantly more important role in driving economic growth and creating jobs than small retail firm.
“We welcome this legislation that would direct the Small Business Administration to focus more on traded-sector firms by ensuring small manufacturers have the capital they need to drive growth and create jobs,” Atkinson said.
These programs provide critical guarantees on loans to small businesses that often have difficulty qualifying for traditional loans. The SBA’s flagship small business loan guarantee programs — the 7(a) and 504 programs — supported more than 684,000 jobs and more than 60,700 small businesses in FY2015.