WASHINGTON — The Small Business Administration emphasized small-dollar lending throughout Administrator Isabel Casillas Guzman's nearly four-year tenure. It's now moving in the opposite direction under Guzman's successor, Kelly Loeffler.
Loeffler, who was confirmed as administrator Feb. 19, is supporting a new bill that would double the size limit on manufacturing loans to $10 million. The higher maximum would apply to manufacturing loans backed by banks under both the SBA's 7(a) program and its 504 program.
Loeffler appeared Thursday at a press conference on the lawn outside the U.S. Capitol with bill's principal sponsors, Sen. Joni Ernst, R-Iowa, who chairs the Senate Committee on Small Business and Entrepreneurship, and Rep. Roger Williams, R-Texas, chairman of the House Small Business Committee.
"I'm grateful to Sen. Ernst and Rep. Williams for leading this bipartisan effort that will empower our small businesses to reclaim our economic independence and rebuild the foundation of American power," Loeffler said.
Sen. Chris Coons, D-Del., has agreed to co-sponsor the bill in the Senate. A Democrat will soon be added to the list of House co-sponsors, according to Ernst, but she did not say who it would be.
"This is something we all do agree on," Ernst said at the press conference. "It should move very quickly. I am hopeful that we can get this over the finish line, get it to the president as soon as possible."
"This is how we keep manufacturing jobs in America," Coons said in a press release.
Government-guaranteed lending to manufacturers has surged during the first three months of the Trump presidency, according to the SBA. The agency said it approved 1,120 7(a) loans to manufacturing borrowers totaling $677 million. The comparable numbers during the first three months of President Joe Biden's term were about 650 loans for $497 million, the agency stated.
Trump has made boosting manufacturing a priority in his second term. At an April 2 event where he introduced a controversial reciprocal tariff strategy, he promised that "jobs and factories will come roaring back into our country."
The Trump Administration has touted commitments from a number of companies to invest billions of dollars in research and development and manufacturing projects inside the United States. At the same time, many analysts, including some bankers, have expressed concern that higher tariffs are contributing to an economic slowdown and could throw the country into a recession.
Manufacturing activity declined in April, its second consecutive monthly decline, the Institute for Supply Management reported Thursday. The ISM's factory gauge fell from 49 in March to 48.7. Readings below 50 indicate contraction.
At the press conference on Capitol Hill, Williams said small business owners, including manufacturers, are more concerned about access to capital than they are about tariffs.
"I travel all around the country talking to people in business, like me," said Williams, who owns an automobile dealership in Weatherford, Texas. "They're not talking tariffs. They're talking access to capital. They've got the ideas. They need the capital."
Ernst said that doubling the size of SBA-backed manufacturing loans "will make a huge difference." She added: "It's a carrot to bring manufacturing into the United States."
Loeffler said she wasn't unduly concerned about the impact that larger manufacturing loans might have on the SBA's asset quality. She said that larger manufacturing loans rank among the best-performing credits in the agency's portfolio.
While the Biden-era SBA did not ignore manufacturing, its key focus was promoting loans of $500,000 or less. Small-dollar credits were seen as a means to deliver more capital to women, minority and veteran small business owners.
During Guzman's tenure, the SBA implemented a series of fee waivers and discounts on 7(a) loans up to $1 million in size. In March, Loeffer announced that the agency was restoring fees and other costs to pre-waiver levels in an effort to shore up 7(a)'s finances.
The 7(a) program is SBA's flagship lending vehicle, providing guarantees of up to 85% on loans totaling $5 million or less. The smaller 504 program provides long-term financing for commercial real estate and big-ticket equipment lending.
