Latest news with #MadeinAmericaManufacturingFinanceAct
Forbes
05-05-2025
- Business
- Forbes
SBA Loan Cap May Rise to $10 Million for Manufacturers Under New Bill
SBA chief Kelly Loeffler says bigger loans will help bring manufacturing back to the U.S. (Photo by) Manufacturing companies could soon qualify for bigger Small Business Administration loans. It can't hurt in the effort to bring production back to the U.S., but small business bankers are backing the proposal for a different reason. On May 2, Rep. Roger Williams (R-TX), Sen. Joni Ernst (R-IA), and Sen. Chris Coons (D-DE) introduced the Made in America Manufacturing Finance Act. The bill would raise the $5 million cap on SBA 7(a) and 504 loans to $10 million, but only for manufacturers (Project 2025, a document that has tracked closely with Trump's plans, called for raising the 7(a) loan cap to $50 million for advanced manufacturers). The 7(a) program offers flexible financing for working capital, equipment, and real estate. The 504 program is typically used for fixed assets like land and large machinery. Both are made by private lenders but backed by the SBA, which guarantees a portion of the loan. SBA Administrator Kelly Loeffler endorsed the proposal, calling it a way to help manufacturers grow and compete. The bill fits within a broader Trump administration push to bring manufacturing back to the U.S., paired with new tariffs meant to reduce dependence on foreign production. (Williams and Ernst chair the small business committees in the House and Senate while Coons is on the Senate committee.) Bankers say the higher limit may help some manufacturers invest in equipment or expand facilities, but they don't expect a flood of new factories. 'I'm sure there are manufacturers out there that can benefit... but my guess is there aren't a ton of requests out there,' says Jerry Freedman, a principal at Freedom Business Financing, which helps buyers secure SBA loans. With the future and shape of Trump's on-again, off-again tariffs unclear, many lenders say it's too early to expect a reshoring renaissance just yet. Still, lenders broadly support the bill. Even if it doesn't lead to new factories, they see it as a move toward something they've wanted for years: a higher SBA loan cap for everyone. Of course lenders want a higher cap. They want to make bigger loans, but the ask isn't unreasonable. The current $5 million limit hasn't changed since 2010. If it had been adjusted for inflation, it would be about $7.5 million today. 'While raising the limit isn't a silver bullet to reshore manufacturing, it is definitely an important part of the solution,' says Ray Drew, managing director at Truliant Federal Credit Union and host of The Art of SBA Lending podcast. He says banks often don't make conventional loans in the $5 to $10 million range, especially for new businesses, and SBA lenders are well positioned to fill that gap. But they haven't been able to, not with the current cap. 'We've had requests previously for larger than $5 million SBA loans that we've had to pass on,' says Chris Hurn, founder of Phoenix Lender Services, which helps banks process and manage SBA loans. He sees the bill as a good first step and a chance to spotlight SBA lending. But Hurn says limiting the change to manufacturers is too narrow. With many Baby Boomers looking to sell their companies, buyers need bigger loans for all kinds of businesses, not just factories. Freedom Business Financing's Freedman hopes this bill could do just that. 'I think the fact that the SBA administration is on board with increasing the max limit, even if for a small segment of businesses, has to be a good path to an increase of the limit for the overall program for all industries.' Not everyone is convinced this will lead to broader changes. Matthias Smith, founder of Pioneer Capital Advisory, which advises small business buyers, agrees the change could help some manufacturers invest in equipment. But he hasn't seen much demand for manufacturing acquisitions, in part because they are hard to finance and require deep industry knowledge. He views the bill as more symbolic than game-changing and unlikely to usher in an increase to borrowing limits especially as the SBA is set to roll back looser pandemic-era rules in favor of stricter credit checks, higher equity requirements, and tougher underwriting standards overall. 'I'd be really surprised if they did increase the limit [broadly] because it seems like they're trying to make it harder for people to participate in the program,' Smith says.
Business Upturn
01-05-2025
- Business
- Business Upturn
Administrator Loeffler Applauds Congressional Proposal to Increase Capital for Small Manufacturers
By GlobeNewswire Published on May 2, 2025, 03:05 IST WASHINGTON, May 01, 2025 (GLOBE NEWSWIRE) — Today, Kelly Loeffler, Administrator of the U.S. Small Business Administration (SBA) applauded Senator Joni Ernst (R-IA) and Congressman Roger Williams (R-TX) for introducing new legislation that will double the individual loan limit for 7(a) and 504 small business manufacturing loans from $5 million to $10 million. The legislation aligns with SBA's commitment to restoring American industry through its Made in America Manufacturing Initiative. In support of President Trump's fair-trade agenda and the effort to restore American economic independence, the Made in America Manufacturing Finance Act will provide small manufacturers with new capital to grow, hire, and produce American-made products. Nearly 99% of manufacturers in America are small businesses – and with new capital injection, they will lead the nation's effort to rebuild U.S. supply chains and recover American jobs. 'On Liberation Day, President Trump made a clear promise to fight for our businesses and workers by bringing back the jobs and supply chains that built this nation—and today, we're delivering,' said Loeffler. 'The Made in America Manufacturing Finance Act will double SBA loan limits for small manufacturers, supercharging the return of American industry by giving small businesses the capital they need to expand, hire, and compete. I'm grateful to Senator Ernst and Representative Williams for leading this bipartisan effort that will empower our small businesses to reclaim our economic independence and rebuild the foundation of American power.' Driven by President Trump's pro-growth economic policies, small business demand for capital has skyrocketed. SBA 7(a) loan approvals for small manufacturers have increased by 74% in the first 100 days of this Administration – indicating a strong surge in small business formation and growth. The Made in America Manufacturing Finance Act will empower the SBA to meet this new demand – and supercharge the return of Made in America. # # # About the U.S. Small Business Administration The U.S. Small Business Administration helps power the American dream of entrepreneurship. As the leading voice for small businesses within the federal government, the SBA empowers job creators with the resources and support they need to start, grow, and expand their businesses or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit Disclaimer: The above press release comes to you under an arrangement with GlobeNewswire. Business Upturn takes no editorial responsibility for the same. GlobeNewswire provides press release distribution services globally, with substantial operations in North America and Europe.
