The Trump administration is eyeing an expansion of federal loan programs for manufacturers as part of its “Made in America” initiative.
Kelly Loeffler, head of the U.S. Small Business Administration, said in Hauppauge on Thursday that her agency wants to make bigger loans to factories.
“We are certainly looking at expanding the loan size, expanding the guarantee size. … We’re also looking at our working capital loan to expand that, to make sure manufacturers have the working capital they need to grow and expand,” she said in response to a Newsday question.
The SBA’s flagship 7(a) program offers bank loans of up to $5 million that are guaranteed by the federal government. The loans may be used to buy property and equipment, refinance debt and pay operating expenses.
There also are lines of credit for working capital expenses, such as inventory purchases and selling products overseas, according to the SBA website.
The 504 program offers loans of up to $5.5 million with the federal guarantee — but the lenders are nonprofit Certified Development Companies, which often work in low-income neighborhoods.
The loan guarantees enable borrowers who may not qualify for a conventional loan because of a poor credit history to obtain financing, the website states.
Asked if the expansion of the loan programs would affect only manufacturers or all types of businesses, Loeffler said in an interview, “right now [the proposed changes are] for manufacturing.”
She also said the SBA has approved 1,120 7(a) loans to factories nationwide since Trump’s presidential inauguration on Jan. 20. Together, they total $677 million.
Loeffler spent about an hour on Thursday visiting GSE Dynamics Inc., a maker of component parts for submarines, fighter jets and tanks. The woman-owned business, which began in 1971, has 87 employees.
As GSE CEO Anne Shybunko-Moore walked Loeffler through the factory, the federal official asked about the production process, where the raw materials come from, and about the recruitment and training of workers.
Long Island has more than 3,200 manufacturers who together employ about 70,000 people, according to the Ignite LI trade group.
Local business leaders welcomed the increased aid for factories.
“The SBA recognizes that while our manufacturing sector is strong, expanding access to capital and removing barriers will help mitigate our high cost of living,” said Matt Cohen, president and CEO of the Long Island Association.
Loeffler began her visit with a meeting at the LIA’s Melville headquarters of about 40 executives of companies that make aerospace components, vitamins and drugs, telecommunications equipment and other products.
Loeffler vowed to use her position as a member of the president’s cabinet to ensure that the enforcement of federal regulations is fair to manufacturers and all small businesses. She served in the U.S. Senate for one year after working for Intercontinental Exchange, owner of the New York Stock Exchange, for 25 years.
“Our goal is to cut $100 billion in red tape by the end of the year and we’re well on track to do that,” she said in Hauppauge.
Since taking the SBA’s helm in February, Loeffler has announced plans to reduce the agency’s workforce of 6,500 people by 43%, or 2,700 jobs. She also said she would transfer employees in SBA’s Manhattan office to other locations because of New York City’s unwillingness to cooperate with federal immigration officials.
The actions coincide with Trump’s decision to move the processing of federal student loans from the Department of Education to SBA.
Loeffler said on Thursday that she was returning the SBA workforce to the size it was before COVID-19, when hundreds of people were hired to administer the Paycheck Protection Program loans and other pandemic relief.
“We’ve seen all of these actions take place with not a decrease to service levels – but an increase,” she said responding to a Newsday question.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
