Dive Brief:
- The U.S. Small Business Administration has launched what it calls its first-ever loan program designed to support small manufacturers across the country by providing additional credit for working capital needs.
- Effective Oct. 1, the Manufacturer’s Access to Revolving Credit (MARC) Loan Program will provide a maximum amount of $5 million to borrowers engaged in manufacturing, according to SBA documents. The money must be used for working capital needs, such as inventory purchases or new projects.
- MARC loans can be used in combination with other SBA and conventional commercial loans, providing added flexibility to manufacturers and lenders looking for a new line of credit.
Dive Insight:
The new loan program is part of a larger, ongoing effort to strengthen domestic manufacturing. In March, the SBA pledged to cut $100 billion in regulation, promote workforce development and expand financing for manufacturing to spur U.S. industrial activity.
“With 98% of American manufacturers classified as small businesses, the new MARC Loans represent a powerful source of targeted capital for those who are growing our nation’s production,” SBA Administrator Kelly Loeffler said in a statement.
MARC capital can be structured as a term loan for up to 10 years or a revolving line of credit for up to 20 years. It cannot be used for non-working capital purposes, such as ownership changes and floor plan financing, according to SBA documents. If borrowers default on their MARC loans, the SBA will provide lenders a maximum guarantee of 85% for loans of $150,000 or less and 75% for loans over $150,000.
In May, lawmakers introduced a bill that would double the individual limit for 7(a) and 504 small business manufacturing loans to $10 million. Neither the House nor the Senate have voted on the bill. The SBA also launched a Make Onshoring Great Again Portal that connects small businesses with more than 1 million domestic suppliers and producers.
