Lawmakers and SBA official debate raising manufacturing loan limits to $10 million
Loading...
Summary
Committee members and the SBA's associate administrator discussed proposals to raise SBA loan limits for manufacturers to $10 million, including the Made in America Manufacturing Finance Act referenced by the chair, and whether data supports that threshold.
Chairman Williams and other committee members highlighted the administration's push to expand financing options for small manufacturers and asked the SBA to explain the basis for a proposed $10 million loan limit for manufacturing borrowers.
Thomas Kimsey, the SBA associate administrator for the Office of Capital Access, told the committee that "manufacturing is capital intensive" and that lenders and manufacturers he has met "asked to increase the limit from $5,000,000 to $10,000,000." He said the limit has not been updated since 2010 and that many manufacturers use equipment that can cost more than $1 million.
Why it matters: Several members argued that higher loan limits would help onshoring and expansion of small manufacturers; others cautioned that increases should be grounded in analysis of borrower demand and risk.
Kimsey said the SBA is supporting legislation—cited in the hearing as the Made in America Manufacturing Finance Act (referred to by a bill identifier during questioning)—and told members the agency has approved what he described as a significant increase in loan volume since Jan. 20, which he characterized as a 14% year‑over‑year increase in loan volume. He did not present the committee with a written analysis during the hearing and repeatedly offered to provide budget and modeling support afterward.
Members asked for details about how the $10 million level was chosen and whether the change would apply only to manufacturers or to all borrowers. Kimsey replied that staff would follow up with budget and modeling information and said lenders and manufacturers he has met with believe the increase is necessary to finance modern manufacturing equipment and projects.
Several members who identified themselves as sponsors or supporters of related bills told the committee they favor the increase; committee staff urged the agency to provide the modeling used to arrive at the proposed limit.
Ending: The committee asked the SBA to supply its analysis and modeling that led to the $10 million suggestion and to explain whether the limit should be targeted to manufacturers or applied more broadly.
