Ernst Empowers Small Businesses to Revitalize American Manufacturing

Ernst Empowers Small Businesses to Revitalize American Manufacturing

WASHINGTON - As part of her continuing work to revitalize American manufacturing, Chair Joni Ernst (R-Iowa) led a Senate Committee on Small Business and Entrepreneurship hearing focused on empowering small manufacturers.

During her opening remarks, Ernst spoke about how her bipartisan Made In America Manufacturing Finance Act, which passed out of committee earlier this year, will expand access to capital for small businesses and forge the path to make "Made in America" the norm instead of the exception.

Watch Chair Ernst's full remarks here.

Ernst's full remarks:

"We are here today to discuss the role that the Small Business Administration's 504 Certified Development Company (CDC) loan guaranty program can play in supporting investment in America's small manufacturers.

"Over the course of this year, the Committee has examined the staggering decline of America's manufacturing sector.

"Forty years ago, factories across the country roared with activity, towns thrived, and America felt unstoppable. We were truly unrivaled as a nation.

"Today, many of those same factories stand idle, communities that once depended on them fade and struggle, and millions of jobs have vanished.

"Today, we're seeing some of the lowest levels of manufacturing employment that we've seen in nearly a century.

"Sadly, we're losing more than just jobs. We're losing America's knowledge, talent, innovative edge, and tradition of industrial excellence.

"By neglecting our manufacturing sector and infrastructure, we've crippled our own ability to scale new technologies, leaving us less competitive on the international stage. Simply put, we've let our guard down, and it's our adversaries, like China, who stand to benefit.

"To restore our economic resilience and global dominances, we must empower our small manufacturers to lead the way.

"That starts by providing them with the resources they need to reverse this decline and rebuild our domestic productive capacity.

"In prior hearings, we have explored how we can channel more capital into American manufacturing, whether through private capital committed as part of the Small Business Investment Company program or through 7(a) loans guaranteed by the SBA.

"Today, we're focused on one program that is uniquely suited to helping small manufacturers build and expand: the 504 loan program.

"The 504 loan program is the primary way that SBA helps small business owners buy major fixed assets like real estate, buildings, equipment, and machinery, and even construct facilities from the ground up. It gives borrowers long-term, fixed-rate financing of up to 25 years. That kind of predictability is exactly what small manufacturers need to establish or modernize their operations.

"Thanks to the work of participating CDCs, the 504 program has been able to maintain a low default rate of under one percent per year. In the last five years, it has been under half a percent. That is the hallmark of a loan program that is safe, reliable, and deeply impactful.

"But it isn't perfect. Stakeholders have made clear that improvements can be made to eliminate red tape in the closing process and provide more flexibility to borrowers, especially for rural businesses.

"This Committee has continually looked at ways to build upon the program's success, including consideration of legislation introduced by Senator Young aimed at streamlining the Office of Credit Risk Management's oversight of CDCs.

"Another way to strengthen our manufacturing future is by passing the Made in America Manufacturing Finance Act, which I introduced in April alongside Senator Coons. The Committee reported out the bill in July.

"This bipartisan legislation would double the 504 loan limit from $5 million to $10 million for small manufacturers who need that capital to modernize, grow, and train a new generation of American workers.

"I know from the countless conversations I've had with small business owners that this makes a real difference. Many companies could have expanded faster, hired more workers, and invested in new technologies if only the loan limits had allowed it.

"CDCs tell us the same thing: clients are forced to slow their growth or seek outside funding on less favorable terms simply because their needs couldn't be met by what is currently allowed.

"I am grateful that we're joined today by our panel of CDC lenders and program participants. I look forward to hearing from them about how Congress can improve the 504 program and give American entrepreneurs what they need to build a stronger, more resilient manufacturing future."

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