Dive Brief:
- The U.S. House of Representatives on Monday unanimously passed a bill that would double the Small Business Administration’s loan limit from $5 million to $10 million for domestic manufacturers.
- The Made in America Manufacturing Finance Act aims to unlock more capital for small manufacturers seeking to buy machinery, expand their factories, upgrade equipment or scale production. The bill has advanced to the Senate for further consideration.
- The House also passed four other small business bills this week, including legislation that incentivizes Small Business Investment Company programs to deploy additional money to manufacturing sectors, rural areas and critical national defense technologies.
Dive Insight:
The bill, introduced by Rep. Roger Williams, of Texas, aligns with the SBA’s Made in America Manufacturing Initiative, an effort to rebuild the nation’s “industrial dominance” by cutting regulations and expanding access to capital for small manufacturers.
The legislation would offer increased limit guarantees for 7(a) and 504 loans to small manufacturers with production facilities entirely located in the United States. In other words, companies relying even a small amount on international production for their supply chain wouldn't qualify for the increased limits.
“These entrepreneurs are the backbone of our industrial base, and their success fuels our nation,” Williams said in a statement. “With this legislation, we continue to advance an America First agenda that ensures Main Street remains the driving force in American innovation.”
As part of the initiative, the SBA created an onshoring portal earlier this year that connects manufacturers with domestic producers. The agency also announced it would waive “most upfront fees” for manufacturers in fiscal year 2026 and, more recently, launched the SBA’s first loan program specifically tailored for the industry.
However, the effectiveness of the new program remains to be seen. Revolving credit programs have historically been unpopular among active lenders because the credit cannot be sold on the secondary market, according to experts. The agency is also making its way through a stack of applications following the 43-day government shutdown.
Most manufacturers with 500 people or fewer qualify as small businesses and are eligible for agency loans, according to the SBA. However, there are exceptions depending on the industry. For example, semiconductor machinery and aircraft manufacturers can employ up to 1,500 people and still be eligible for 7(a) and 504 loans.
“Manufacturers are one step closer to unlocking the capital they need to bring home American jobs and industry,” SBA Administrator Kelly Loeffler said in a statement about the bill’s passage in the House.
Additionally, the House passed a bill this week that would require the SBA to create a detailed implementation plan based on recommendations from a Government Accountability Office report to improve IT risk management, cybersecurity and more.
It also passed a bill that would extend the statute of limitations on COVID-19 era fraud and abuse to 10 years within certain SBA programs, and a bill aimed at strengthening the agency’s office of rural affairs.
