The United States Small Business Administration (SBA) recently announced its Made in America Loan Guarantee program, which makes small manufacturers across the U.S. eligible for enhanced support through the Administration’s International Trade Loan (ITL) program. These loans come with a 90 percent federal guarantee, and will help manufacturers expand their facilities, hire workers, and increase production.

The SBA also extended eligibility for the ITL program to small businesses across the food supply chain, including those in agriculture, production, and logistics industries.

SBA Administrator Kelly Loeffler (pictured below), commented, “Industrial dominance is essential to our national security and strength, and the Trump Administration has taken historic action to incentivize ’Made in America’ through tax cuts, deregulation, fair trade, and energy dominance – all of which are restoring American industries and jobs."

She added, "The SBA is taking another step to support reindustrialization with our new Made in America loan guarantee, which will give U.S. manufacturers additional financing to expand operations, modernize equipment, and supercharge domestic production. Small businesses make up 98% of all manufacturers in America, and as I’ve traveled across the country meeting with industry leaders, the demand for additional capital to expand and hire is evident. This Administration is transforming America into a nation of builders once again, as part of an industrial comeback that is being led by small businesses.”

SBA Administrator Kelly Loeffler

The ITL program provides long-term financing to support American producers. Borrowers get an increased SBA guarantee of 90 percent compared to the 75 percent guarantee for the flagship 7(a) loan program. This expanded support enables lenders to have greater confidence to deploy capital into domestic manufacturing, driving investments in machinery, facilities, and production capacity, the SBA says.

As of May 1st, manufacturers across NAICS Sectors 31 - 33 are eligible for the expanded ITL Program. Funds can be used to upgrade or replace equipment to improve productivity and reduce unit costs, modernize facilities and production lines to meet customer and national security requirements, diversify supply chains away from foreign sources, build more resilient inventory positions, and/or expand operations and capacity through strategic acquisitions.

The enhanced SBA funding is in line with the current Administration’s efforts to reshore manufacturing and supply chains. This includes incentives for small manufacturers such as 100 percent expensing on factory equipment, no tax on overtime, and a permanent 20 percent small business deduction. The Administration says it is seeing new demand and growth for small businesses. Last year, the SBA launched its "Make Onshoring Great Again" portal, which is a free tool for small businesses to connect with over one million domestic suppliers and producers.

Lenders and small businesses interested in the updated ITL program are encouraged to contact the SBA’s national team of Finance Managers for more information. The SBA notes that the team also serves as the agency’s working capital specialists and can help lenders and borrowers understand how ITL can be paired with its expanding suite of working capital¹ and Working Capital Pilot.²

¹ https://www.sba.gov/partners/lenders/7a-loan-program/types-7a-loans#manufacturers-access-to-revolving-credit-marc-loans

² https://www.sba.gov/funding-programs/loans/7a-loans#7a-working-capital-pilot-wcp-program