S1555-119

What This Bill Does

Raises SBA loan limits for small manufacturers with U.S.-located production facilities by defining small manufacturer, increasing 7(a) outstanding and guaranteed loan thresholds, raising export working-capital limits, increasing 504 loan project limits from $5,500,000 to $10,000,000, and requiring SBA Inspector General and Administrator reports on risk, defaults, job creation, and job retention.

Who Benefits and How

Small manufacturers in NAICS sectors 31, 32, and 33 with all production facilities in the United States benefit from larger SBA-backed credit capacity: 7(a) outstanding amounts can reach $7,500,000 with gross loans up to $10,000,000, certain export-purpose guarantees can reach $9,000,000 with $8,000,000 for working capital, export loans can reach $10,000,000, and 504 loans can reach $10,000,000. SBA 7(a) lenders and 504 certified development companies benefit from larger eligible manufacturing deals. Employees of small manufacturers benefit if larger loans create or retain jobs. Congress benefits from risk and job-effect reports.

Who Bears the Burden and How

SBA program staff must administer higher loan caps and distinguish small manufacturers using NAICS sector and U.S.-facility criteria. The SBA Inspector General must analyze projected default rates, early default rates, default amounts, guaranty purchase amounts, and no-cost-to-government impacts for the first-year loan cohort. The SBA Administrator must report annually for five years on larger loans, total dollars per job created or retained, and whether loans prevented job losses. Federal taxpayers bear risk if larger guarantees increase defaults or guaranty purchase amounts despite the no-cost program requirement.

Key Provisions

• Defines small manufacturer as a small business in NAICS sector 31, 32, or 33 with all production facilities in the United States.
• Raises certain SBA 7(a) loan thresholds for small manufacturers to $7,500,000, $9,000,000, and gross loan amounts up to $10,000,000.
• Provides up to $8,000,000 for working capital, supplies, or export-purpose financing within the small-manufacturer guarantee increase.
• Raises the Small Business Investment Act section 502 project limit for small manufacturers from $5,500,000 to $10,000,000.
• Requires an SBA Inspector General risk and default analysis within two years.
• Requires five years of SBA Administrator reports on larger manufacturing loans, dollars per job created or retained, and job-loss prevention.