Sens. Chris Coons, D-Delaware, and Cory Gardner, R-Colorado, recently introduced the Investing in America’s Small Manufacturers Act.
The act will increase the number of affordable loans to small manufacturers through the Small Business Administration’s flagship loan guarantee programs.
Lack of access to affordable capital can impact the manufacturing sector disproportionately because of its capital-intensive nature and the need to finance inventories over longer periods than other sectors of the economy. Small manufacturers have limited access to cash reserves and often have difficulty securing adequate lines of credit through traditional lenders.
The bill authorizes an increase in the maximum SBA guaranty on loans to small manufacturers and reduces the fee small manufacturers pay on these loans. The legislation also directs the SBA to use its resources to help small manufacturers navigate the SBA’s application process, thereby making them more attractive to lenders and increasing their ability to access much needed credit.
The 7(a) and 504 programs are the SBA’s flagship small business loan guarantee programs. The programs provide guarantees on loans to small businesses that often have difficulty qualifying for traditional loans.