Could an SBA Loan Be the Growth Boost Your Manufacturing Business Needs?

Could an SBA Loan Be the Growth Boost Your Manufacturing Business Needs?

By Diane Lewis
VP Manufacturing Solutions & Center Operations

In March, the U.S. Small Business Administration (SBA) launched its Made in America Manufacturing Initiative, aiming to increase small manufacturers’ access to capital, attract more public and private investment in domestic manufacturing, and help small businesses export their products around the world.

If you run a manufacturing business, you know staying competitive often means investing before you feel fully ready — buying that next piece of equipment, expanding your facility, or hiring more people to keep up with demand. But for many small and mid-sized manufacturers, getting affordable financing can feel like an uphill battle.

That’s where SBA loans come in. These government-backed loans have helped manufacturers grow, modernize, and create jobs for decades, often when traditional bank loans just aren’t an option.

So, What Exactly Is an SBA Loan?

First, let’s clear up a common misconception:
The SBA doesn’t lend you money directly. Instead, they guarantee a large portion of your loan through a participating lender — usually your local bank or credit union. This means the lender takes on less risk, which gives you a better shot at securing the funding you need.

There are three main SBA loan programs that manufacturers tend to use:

• SBA 7(a) Loans — The most flexible option, covering working capital, equipment, inventory, real estate, and more, up to $5 million.
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• SBA 504 Loans — Ideal if you need to buy major assets like a new building, larger equipment, or renovations. Long-term, fixed-rate financing keeps payments predictable.
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• SBA Microloans — Great for smaller shops or startups that only need up to $50,000 for supplies, inventory, or a single piece of equipment.
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 Why Manufacturers Appreciate SBA Loans

Traditional bank loans can be tough to land, especially if you’re a smaller manufacturer. Here’s what makes SBA loans stand out:

• Smaller Down Payments — Sometimes as low as 10%, keeping more cash in your business.
• Longer Repayment Terms — Up to 25 years for real estate and 10 years for equipment means lower monthly payments.
• Competitive Interest Rates — Because the loan is partially guaranteed, lenders often offer better rates.
• Flexibility — Use the money for what your shop actually needs: machinery, a bigger space, extra staff — you name it.
• Support for Underserved Businesses — Women-owned, minority-owned, and veteran-owned manufacturers often find SBA loans open doors that traditional banks keep shut.

How Are SBA Loans Different From Regular Bank Loans?

Here’s the big picture:

So, if your business is strong but your credit score isn’t perfect — or you don’t have enough collateral for a big loan — an SBA loan could be your best bet.

 What’s the Catch?

It’s not really a “catch,” but be ready for paperwork. Getting an SBA loan usually takes some time, typically a few weeks to a few months. Lenders will want to see:

• Your business plan (how you’ll use the money)
• Financial records (tax returns, profit & loss, cash flow)
• Personal and business credit info
• Collateral details (what you’re willing to back the loan with)

Tip: Connect with your local SBA District Office or a Small Business Development Center (SBDC). They can help you prep your application — often at no cost.
Find your local help

Does It Really Make a Difference?

Absolutely! Last year alone, the SBA helped small businesses access over $27 billion in affordable financing. In manufacturing, that translates to new jobs, new product lines, and modern equipment that keeps your business competitive.

Ready to Explore SBA Lending?

If you’re serious about expanding your shop, upgrading machinery, or simply keeping your cash flow healthy, an SBA loan could be the key that opens the door.

Bottom line? Don’t let limited capital hold your manufacturing business back. Explore your options, do your homework, and don’t be afraid to ask for help. The right funding at the right time can set you up for growth that lasts.

Your Next Step

Ready to explore your SBA loan options?
While MRC doesn’t provide loans directly, we can help you connect with the right people and resources to get started. Contact Diane Lewis at diane.lewis@mrcpa.org or (610) 554‑5196 — we’re here to point you in the right direction.

Sources:

• U.S. Small Business Administration
• How the Manufacturing Industry Can Leverage SBA Lending for Growth and Modernization
• SBA Announces Made in America Manufacturing Initiative

About the Author

Diane Lewis

As Vice President of Manufacturing Solutions & Center Operations, Diane brings MRC clients her expertise and guidance in federal and state resources, grants, and educational programs.  Diane routinely meets with clients, offering advice and finding solutions to help them grow locally to compete globally.

For over 30 years, Diane has been helping manufacturers in the Greater Lehigh Valley to identify and address the complex challenges they face in an increasingly competitive marketplace.   She leads MRC’s team of regional directors, who meet with manufacturers to listen to their needs, help with current issues, develop strategies, adopt new technologies, and train their workforce.  She was instrumental in developing and launching many of the services and training programs that we currently offer