Investing in America's Small Manufacturers Act

To amend the Small Business Act and the Small Business Investment Act of 1958 to increase the percentage of loans guaranteed for small business concerns that are manufacturers. 1. Short title This Act may be cited as the Investing in America's Small Manufacturers Act 2. Findings Congress finds the following: (1) In 2015, manufacturers contributed over $2,000,000,000,000 to the United States economy and accounted for over 12 percent of United States gross domestic product. (2) Manufacturing is one of the most important sectors of the United States economy with respect to employment. In 2013, the manufacturing sector supported over 17,000,000 indirect jobs in the United States, in addition to the 12,000,000 individuals who were directly employed in manufacturing. Combined, these indirect and direct manufacturing jobs represented more than 20 percent of United States employment in 2013—more than any other sector. (3) While the United States has added over 14,000,000 non-farm jobs since 2010, manufacturing job growth has lagged and added only approximately 900,000 jobs. Post-recession job recovery averages since the 1940s indicate that another 1,200,000 manufacturing jobs should have been created during this period. (4) Small manufacturers are the backbone of the United States manufacturing industry, accounting for nearly half of all manufacturing jobs in the United States. Ensuring that small manufacturers have adequate access to capital is critical to creating manufacturing jobs and the growth of the United States economy. (5) The 2015 Federal Reserve Small Business Credit Survey indicates that of the 52 percent of manufacturers that applied for financing during the survey period, 65 percent did so to expand their business or to pursue a new business opportunity. The survey also indicates that 42 percent of manufacturers received less financing than they requested, the primary result of which was delayed expansion of their business. (6) The loan guarantee programs of the Small Business Administration under section 7(a) of the Small Business Act ( 15 U.S.C. 636(a) 15 U.S.C. 695 3. Small manufacturers (a) Loan guarantee percentage Section 7(a)(2) of the Small Business Act ( 15 U.S.C. 636(a)(2) (1) in subparagraph (A), in the matter preceding clause (i), by striking and (E) (E), and (F) (2) by adding at the end the following: (F) Participation for manufacturers (i) In general In an agreement to participate in a loan on a deferred basis under this subsection for a small business concern assigned to a North American Industry Classification System code for manufacturing or that is designated by the Administrator under clause (ii), the participation by the Administration shall be 90 percent. (ii) Addition of advanced manufacturing sectors After submitting notice to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives, the Administrator may designate a North American Industry Classification System code for purposes of clause (i) if the Administrator determines the code— (I) is not a manufacturing code under the North American Industry Classification System; and (II) corresponds to a sector in which manufacturing is a considerable component of the operations of a small business concern, as determined by the Administrator, including advanced manufacturing. . (b) Guarantee fee reduction Section 7(a)(18) of the Small Business Act ( 15 U.S.C. 636(a)(18) (1) in subparagraph (A), by striking With respect Except as provided in subparagraph (C), with respect (2) by adding at the end the following: (C) Manufacturers (i) In general Subject to clause (ii), with respect to a loan guaranteed under this subsection for a small business concern described in paragraph (2)(F)(i)— (I) the Administration may not collect a guarantee fee under this paragraph for a loan of not more than $350,000; and (II) for a loan of more than $350,000, the Administration shall collect a guarantee fee under this paragraph equal to 50 percent of the guarantee fee that the Administration would otherwise collect for the loan. (ii) Exception The requirements of clause (i) shall not apply to loans made during a fiscal year if— (I) the budget of the President for that fiscal year, submitted to Congress under section 1105(a) of title 31, United States Code, includes a cost for the program established under this subsection that is above zero; and (II) the Administrator submits to Congress— (aa) notice regarding the determination of cost described in subclause (I); and (bb) a detailed discussion indicating why not implementing clause (i) will cause the cost of the program established under this subsection to be not more than zero. . (c) Assistance through SBA programs The Small Business Act ( 15 U.S.C. 631 (1) in section 7(a) ( 15 U.S.C. 636(a) (35) Assistance for small manufacturers The Administrator shall ensure that each district office of the Administration provides training to small business concerns described in paragraph (2)(F)(i) in obtaining assistance under this subsection, including with respect to the application process and partnering with participating lenders under this subsection. ; (2) in section 8 ( 15 U.S.C. 637 (c) Assistance for small manufacturers in SCORE program (1) Definition In this subsection, the term SCORE program (2) Volunteers Under the SCORE program, the Administrator shall recruit volunteers to assist small business concerns described in section 7(a)(2)(F)(i) in obtaining assistance under section 7(a) and title V of the Small Business Investment Act of 1958 ( 15 U.S.C. 695 ; (3) in section 21(c)(3) ( 15 U.S.C. 648(c)(3) (A) in subparagraph (S), by striking and (B) in subparagraph (T), by striking the period at the end and inserting ; and (C) by adding at the end the following: (U) providing training to small business concerns described in section 7(a)(2)(F)(i) in obtaining assistance under section 7(a) and title V of the Small Business Investment Act of 1958 ( 15 U.S.C. 695 ; (4) in section 29(b) ( 15 U.S.C. 656(b) (A) in paragraph (2), by striking and (B) in paragraph (3), by striking the period at the end and inserting ; and (C) by adding at the end the following: (4) training to small business concerns owned and controlled by women that are small business concerns described in section 7(a)(2)(F)(i) in obtaining assistance under section 7(a) and title V of the Small Business Investment Act of 1958 ( 15 U.S.C. 695 ; and (5) in section 32 ( 15 U.S.C. 657b (g) Assistance for small manufacturers The Associate Administrator shall ensure that Veterans Business Outreach Centers assist small business concerns described in section 7(a)(2)(F)(i) in obtaining assistance under section 7(a) and title V of the Small Business Investment Act of 1958 ( 15 U.S.C. 695 . (d) Partnering with NIST The Small Business Administration and its resource partners may establish partnerships with the Hollings Manufacturing Extension Partnership Program of the National Institute of Standards and Technology and its affiliated centers to facilitate outreach to small manufacturers in providing training and guidance with respect to the application process for loans guaranteed by the Administration. 4. Development company debentures (a) Amount of guaranteed debenture Section 503(a) of the Small Business Investment Act of 1958 ( 15 U.S.C. 697(a) (5) (A) Any debenture issued by a State or local development company to a small manufacturer (as defined in section 501(e)(6)) with respect to which a guarantee is made under this subsection shall be in an amount equal to not more than 50 percent of the cost of the project with respect to which such debenture is issued. (B) Subparagraph (A) shall not apply to debentures issued during a fiscal year if— (i) the cost to the Federal Government of making guarantees under this section is above zero; and (ii) the Administrator submits to Congress— (I) notice regarding the determination of cost described in clause (i); and (II) a detailed discussion indicating why not implementing subparagraph (A) will cause the cost to the Federal Government of making guarantees under this section to be not more than zero. . (b) Startup small manufacturers Section 502(3)(C)(i) of the Small Business Investment Act of 1958 ( 15 U.S.C. 696(3)(C)(i) is not a small manufacturer (as defined in section 501(e)(6)) and small business concern 5. Federal loan guarantees for innovative technologies in manufacturing (a) Transfer of existing program The Stevenson-Wydler Technology Innovation Act of 1980 ( 15 U.S.C. 3701 (1) by striking section 26 ( 15 U.S.C. 3721 (2) by redesignating sections 27 and 28 ( 15 U.S.C. 3722 (b) Authority of SBA (1) Definitions In this subsection— (A) the term Administrator (B) the term business loan programs of the Administration 15 U.S.C. 636(a) 15 U.S.C. 695 (C) the term small manufacturer (2) Authorization To the extent the Administrator determines that the assistance available to small manufacturers under section 26 of the Stevenson-Wydler Technology Innovation Act of 1980 ( 15 U.S.C. 3721 (3) Reporting The Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report regarding any determination or activity of the Administrator under paragraph (2). (c) Savings clause Any loan guarantee issued under section 26 of the Stevenson-Wydler Technology Innovation Act of 1980 ( 15 U.S.C. 3721

Summary: Investing in America's Small Manufacturers Act This bill amends the Small Business Act to authorize the Small Business Administration (SBA) to guarantee 90% of a loan to a small business manufacturing concern. The SBA may not collect a guarantee fee for a loan of not more than $350,000. For loans exceeding that amount, the fee shall be 50% of the guarantee fee that the SBA would otherwise collect for the loan. The SBA must provide training to small manufacturers in obtaining SBA assistance, including on the application process and partnering with participating lenders. This bill authorizes the SBA and its partners to establish partnerships to facilitate outreach to small manufacturers with respect to the application process for SBA loan guarantees. A state or local development company's debenture issued to a small manufacturer for an SBA loan guarantee may not exceed 50% of the project's cost, subject to certain exceptions.