Congressman Tim Ryan Introduces Bipartisan, Bicameral Legislation to Increase Investment in U.S. Manufacturing
Washington, DC – Congressmen Tim Ryan (D-OH) and Tom Reed (R-NY) introduced a bill today increasing access to affordable capital for small manufacturers. The Strengthening Investment to Grow Manufacturing in America (SIGMA) Act would increase affordable loans to manufacturers, provide incentives to grow operations, support manufacturing startups, spur investment in small manufacturing businesses and expand education assistance to small manufacturers. Senators Chris Coons (D-CT), Jacky Rosen (D-NV), Tim Scott (R-SC) and Cory Gardner (R-CO) introduced a companion bill in the Senate. To view the full bill, click here.
“Small manufactures strengthen our economy and manufacturing industry. But the lack of access to capital negatively impacts U.S. manufacturing’s ability to modernize equipment, grow businesses, and create jobs. The SIGMA Act helps address this systemic problem and provides small manufacturers the capital they need to modernize,” said Congressman Ryan. “As the Co-Chair of the Congressional Manufacturing Caucus, I understand the importance and urgency of investing in our manufacturing industry to prepare for the future. I’ve seen firsthand how outdated equipment can prevent a manufacturer from competing globally. The steel mills that closed in Northeast Ohio were operating with technology from World War I and unable to keep up with competition from around the world. We can’t let that happen again. This bill will help pave the way for small manufacturers to succeed and ensure our manufacturing industry and economy continues to be the best in the world.”
“Small manufacturers are the backbone of the U.S. manufacturing industry and account for nearly half of all manufacturing jobs in the United States. Unfortunately, these manufacturers oftentimes struggle to gain access to capital needed to give them a fair chance grow, expand and create new jobs. This is why the SIGMA act is a no brainer in order to continue to accelerate the growth of our economy,” said Congressman Reed.
The SIGMA Act is endorsed by the American Small Manufacturers Coalition, American Society of Mechanical Engineers, Bipartisan Policy Center, Delaware Small Business Development Center, Information Technology & Innovation Foundation, Intelligent Manufacturing Systems International, Manufacturing Alliance of Communities, National Association of Development Companies, Small Business Investor Alliance, Small Business Majority, State Science and Technology Institute, Third Way, and True Access Capital (formally First State Community Loan Fund).
"Small manufacturers account for nearly half of all manufacturing jobs in the United States, but they are disproportionately impacted by a lack of access to capital," said Small Business Majority Founder & CEO John Arensmeyer. "Fortunately, the Small Manufacturers Access to Capital Act would help solve this problem by increasing the maximum Small Business Administration (SBA) 7(a) loan guarantee rate to 90% and increasing the loan limit on 504 loans to $10 million for manufacturers. What's more, this legislation would support small manufacturers by directing the SBA to utilize its existing resources to help small manufacturers access its financing assistance programs.”
“Access to capital to modernize plant equipment to take advantage of the revolution in digital manufacturing, to innovate new products, or to scale their business is a serious challenge for many small U.S. manufacturers,” said ITIF President Dr. Rob Atkinson. “The Strengthening Investment to Grow Manufacturing in America Act makes important reforms to SBA Section 7(a) and 504 loan programs that will facilitate, ease, and expand their use by U.S. manufacturers and thus play a catalytic role in revitalizing American manufacturing.”
“With the introduction of the Strengthening Investment to Grow Manufacturing in America Act, Senator Coons continues to be a great champion of America’s small manufacturers,” said Third Way Executive Vice President for Policy Jim Kessler. “The bill builds on his legacy of support of startups, small business investment, and job training.”
“As manufacturing technologies advance, small manufacturers will play an increasingly important role in ensuring these innovations are implemented domestically so that the U.S. fully benefits from these innovations. With small manufacturers making up much of the domestic manufacturing base, this Act will create more opportunities for these small businesses to engage and grow by granting more creditworthy small manufacturers access to affordable loans,” said ASME Executive Director & CEO Thomas Costabile. “Further, this Act will encourage the manufacturing sector to evolve and keep pace with new technologies by increasing support for startups and by making it easier to invest in small manufacturers that are essential to U.S. national security. ASME applauds your work and supports expanding opportunities for small manufacturers to grow their capabilities, which will allow the U.S. to compete more effectively on a global scale. Thank you for your leadership on this issue.”
“IMS International, a non-profit organization helping SME’s integrate advanced manufacturing technologies, and its Board of Directors unanimously endorse the bill ‘Investing in America’s Small Manufacturers Act’ proposed by Senator Coons,” said IMS-I Managing Director Dan Nagy. “We believe the additional support of affordable loans and incentives for small manufacturers will not only grow our small manufacturers but also promote advanced technology integration. This bill will help small manufacturers remain competitive as stand-alone companies and secure their positions in supply chains. Through recognition of ‘Advanced Manufacturing Sectors’ in the ‘Small Business Act,’ entrepreneurship and growth is supported for innovative small manufacturers. Overall, the bill contributes to the health and growth of our critical manufacturing sector.”
“The Small Business Investor Alliance (SBIA) thanks Senators Coons, Tim Scott, and Gardner for introducing the Strengthening Investment to Grow Manufacturing in America Act. This legislation is thoughtful policy that promotes investment in small manufacturers - the source of some of our country's greatest innovation,” said SBIA President Brett Palmer.
“The Strengthening Investment to Grow Manufacturing in America Act is a major step in supporting small manufacturers, who are critical to the nation’s manufacturing industry, and strengthening economic and national security,” says BPC Action Executive Director Michele Stockwell. “BPC Action applauds Senators Coons and Gardner for their continued bipartisan leadership on this fundamental issue.”
- Increases affordable loans to manufacturers. The bill increases the maximum 7(a) loan guarantee rate to 90% and increases the loan limit on 504 Loans to $10,000,000 for manufacturers.
- Incentivizes manufacturers to grow operations. The bill reduces guarantee fees that small manufacturers are required to pay on 7(a) loans. Specifically, the bill eliminates 7(a) guarantee fees for small manufacturers on loans under $350,000 and reduces fees by 50% for loans that are more than $350,000. The bill also reduces the financing requirement and increases the refinancing for facility expansions for small manufacturers.
- Supports manufacturing startups. The bill eliminates a penalty new manufacturers are required to pay when applying for a 504 loan. Under current law, businesses that have been operating for less than two years are required to pay 15% of project financing. This bill allows start-up manufacturers to pay 5% of project financing. The bill also eases the occupancy requirement for start-up manufacturers to allow these businesses to grow.
- Spurs investment in small manufacturing businesses. The bill provides discount debentures for manufacturers and provides additional leverage capacity in the Small Business Investment Company (SBIC) for investments in small manufacturing businesses that are in low or moderate income areas, rural areas, areas of high unemployment, veteran-owned, minority-owned, woman-owned, have demonstrated employment growths, or are vital to national security.
- Expands education assistance to small manufacturers. The bill directs the SBA to utilize its existing resources to help small manufacturers access SBA financing resources, including the 7(a) and 504 programs. It specifically directs the SBA to use its resources to assist manufacturers in navigating the application process to increase their ability to access credit.