Gardner, Coons Introduce Bipartisan Bill to Help Small Manufacturers Access Affordable Loans
Washington, DC – U.S. Senators Cory Gardner (R-CO) and Chris Coons (D-DE) today introduced the Investing in America’s Small Manufacturers Act, which will increase the number of affordable loans to small manufacturers through the Small Business Administration’s (SBA) flagship loan guarantee programs.
Lack of access to affordable capital impacts 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 in particular have limited access to cash reserves and often have difficulty securing adequate lines of credit through traditional lenders.
The SBA assists small businesses around the country in a number of ways, most importantly through programs that guarantee loans offered by financial institutions to qualified small businesses. Unfortunately not enough small manufacturers have taken advantage of the services that the SBA can provide.
To address these challenges, the bill authorizes an increase in the maximum SBA guarantee 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.
“It’s important that small manufacturers have access to the capital they need to jumpstart their businesses, and our bill will do just that,” said Senator Gardner. “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.”
“Small manufacturers are the backbone of the U.S. manufacturing industry and account for nearly half of all manufacturing jobs in the United States,” said Senator Coons. "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. Support for manufacturing is bipartisan and a policy area where Congress and the Administration can find common ground.”
“Bolstering manufacturing and other traded sectors is critical to improving U.S. economic competitiveness. There are significant differences for U.S. job creation and prosperity between a small manufacturer and a small retail firm: The former plays a significantly more important role in driving economic growth and—through the multiplier effect—jobs. 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,” said Dr. Robert D. Atkinson, President, ITIF.
The 7(a) and 504 programs are the SBA’s flagship small business loan guarantee programs. These programs provide critical guarantees on loans to small businesses that often have difficulty qualifying for traditional loans. According to the SBA, in FY 2015, 7(a) and 504 lending supported over 684,000 jobs and over 60,700 small businesses.
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