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Unlocking Growth for U.S. Manufacturers: SBA’s New MARC Loan/Line of Credit Program

If you’re a manufacturing business owner—or considering buying one—there’s a powerful new financing tool you need to know about: the Manufacturers’ Access to Revolving Credit (MARC) program, launched by the U.S. Small Business Administration (SBA). This groundbreaking initiative is designed to provide flexible, working capital to small manufacturers, helping them scale operations, create jobs, and bring production back to American soil.

 What Is the MARC Program?

The MARC program is a new loan product under the SBA’s flagship 7(a) loan program, specifically tailored for manufacturers classified under NAICS codes 31-33. It offers revolving lines of credit or term loans of up to $5 million, with SBA guarantees up to $3.75 million

Unlike traditional SBA loans, MARC loans are restricted to working capital use only—meaning funds can be used for inventory, payroll, raw materials, and short-term operational needs, but not for fixed asset purchases. The line cannot be used for debt refinance, changes or ownership or to pay delinquent taxes.

Why It Matters for Business Owners and Buyers of Manufacturing Businesses

Whether you’re already running a manufacturing business or looking to acquire one, MARC offers several strategic advantages:

Flexible Capital for Growth

MARC loans are designed to meet the dynamic cash flow needs of manufacturers. You can structure the loan as a revolving line of credit, allowing you to draw funds as needed and repay them as cash comes in. This can be done through a traditional borrowing base or for strong credit requests and open and active line that is renewed annually.

 Support for Onshoring and Expansion

The program aligns with the SBA’s Made in America Manufacturing Initiative, which aims to reshore production and rebuild domestic supply chains. MARC loans can help fund expansion projects, new customer contracts, and increased production capacity.

 Enhanced Loan Structuring Options

MARC loans can be combined with other SBA, business acquisition loans or conventional loans, giving buyers and current owners more flexibility in financing working capital needs or growth. Also, it is important to note that through September 30, 2026, SBA fees on regular SBA 7(a) loans for Manufacturers of amounts $950,000 or less, the upfront guaranty fee is reduced to 0% saving up to $25,000 in SBA fees.

Key Features of MARC Loans

  • Loan Size: Up to $5 million
  • Use of Proceeds: Working capital only
  • Structure: Revolving line of credit or term loan
    • The Line of Credit can have a term up to 10 years revolving with an additional 10-year automatic term out period.
  • Interest Rates: For line amounts greater than $350,000, interest rate cannot exceed Prime + 3.00%
  • Fees: The lender can charge up to an annual fee of .50% up to 2% on the outstanding balance (not the line amount). SBA fee is the same as other SBA guaranteed loans.
  • Collateral: Mandatory liens on accounts receivable, inventory and other business assets including a blanket UCC filing.
  • Servicing: Annual reviews, Debit Service Coverage Ratio testing, and collateral monitoring
  • Eligibility: Small manufacturers under NAICS 31-33

What Buyers of a Manufacturing Business Should Know

If you’re acquiring a manufacturing business, MARC loans can be a strategic tool to finance post-acquisition working capital needs. You’ll need to ensure the target company meets SBA eligibility requirements and has the operational discipline to comply with MARC’s servicing standards.

Next Steps for Business Owners

  1. Review your working capital needs and determine if a revolving credit facility is right for your business.
  2. Prepare for compliance: Ensure your financials, collateral, and operational practices align with MARC’s requirements.
  3. Talk to an SBA-approved lender about MARC eligibility and structuring options.

The MARC program represents a major step forward in empowering small manufacturers to thrive in a competitive global market. Whether you’re scaling your current operation or entering the manufacturing space, this new SBA initiative could be the key to unlocking your next phase of growth.

 

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Understanding SBA 7(a) Loan Interest Rates: What Drives the Cost and Is It Worth It?

The SBA 7(a) loan program is one of the most popular financing options for small businesses in the U.S., offering flexible terms and government-backed security. But when it comes to interest rates, the picture can be complex. Let’s break down what affects SBA 7(a) loan pricing, how it varies across industries, and whether it’s truly a smart financial move.

What Drives SBA 7(a) Loan Interest Rates Up?

Several factors can push interest rates higher:

  • Risk Profile of the Borrower: Lower credit scores, limited collateral, or unstable cash flow can result in higher rates.
  • Loan Size and Term: Smaller loan amounts often carry higher rates due to increased lender risk.
  • Market Conditions: Rising Federal Reserve rates or inflation can increase the base rate (Prime Rate), which SBA loans are tied to.
  • Industry Volatility: Businesses in high-risk sectors (e.g., restaurants, construction) may face higher rates due to perceived instability.

What Drives Rates Down?

Conversely, rates can be reduced by:

  • Strong Financials: High credit scores, solid revenue, and profitability can lead to better terms.
  • Collateral and Guarantees: Offering real estate or equipment as collateral can lower perceived risk.
  • Experience and Business History: Established businesses with proven track records often qualify for lower rates.
  • Competitive Lending Environment: When lenders compete for SBA borrowers, they may offer more favorable terms.

Why Are Some Companies’ SBA Loans So Expensive?

  • Poor Credit or New Businesses: Startups or owners with limited credit history often pay more.
  • High-Risk Industries: Sectors with high failure rates or regulatory challenges tend to be priced higher.
  • Low Documentation or Fast Funding: Loans that require minimal paperwork or offer quick turnaround may come with premium pricing.
  • Secondary Market Pricing: Many lenders want to charge more as they can gain more income from selling the loans with higher interest rates it the secondary market.

Why Are Some Companies’ SBA Loans So Cheap?

  • Strong Current Banking Relationships: Businesses with existing ties to lenders may receive preferred rates.
  • Low-Risk Profiles: Stable industries, strong financials, and collateral reduce lender risk.
  • Volume Discounts: Some lenders offer better rates to businesses borrowing larger amounts or using multiple products.

Where Do SBA 7(a) Interest Rates Fall?

As of recent data, SBA 7(a) interest rates typically range from:

  • Variable Rates: Prime + 2.25% to Prime + 4.75%
  • Fixed Rates: 6% to 10%, depending on term and borrower profile

The Prime Rate is the benchmark, and lenders add a margin based on risk and loan size. Rates are capped by the SBA to protect borrowers.

Industry Packaging and Service Levels

Loan packaging fees and service levels vary widely:

  • Basic Packaging: May cost $1,000–$2,500, covering document preparation and submission.
  • Industry-Specific Expertise: Lenders specializing in certain sectors may charge more but offer tailored advice and faster approvals.

Lifetime Cost vs. Initial Price

While upfront fees and interest rates matter, the lifetime cost of an SBA loan includes:

  • Total Interest Paid Over Time
  • Prepayment Penalties (if any)
  • Opportunity Cost of Capital

A loan with a slightly higher rate but better terms (e.g., longer repayment, no balloon payments) may be more affordable in the long run.

Historical Pricing Trends

Historically, SBA 7(a) rates have followed the Prime Rate closely:

  • Low-Rate Era (2010–2021): Rates hovered around 5–7% due to low Prime.
  • Post-COVID Inflation (2022–2024): Rates surged to 9–11% as the Fed raised interest rates.
  • Current Stabilization (2025): Rates are settling in the 8–10% range, with expectations of gradual decline.

Verdict: For many small businesses—especially those without access to traditional financing—SBA 7(a) loans are absolutely worth considering. But it’s essential to compare offers, understand the full cost, and align the loan with long-term business goals.

Photo by Markus Henze on Unsplash

The Significance of Business Experience When Buying a Business

Buying a business is a significant undertaking that requires careful consideration and being strategic when making decisions. One of the key factors that can impact success is the buyer’s level of business experience.
Individuals with prior business experience should be familiar with managing day-to-day operations, finances, and any regulatory issues that come up.  These Buyers with experience are better equipped to assess the strengths and weaknesses of a business, enabling them to identify opportunities for growth and areas that may require improvement.
Industry dynamics is a benefit of having experience. Different industries have different trends and regulations. Individuals with prior exposure within that industry are better positioned to grasp these intricacies, reducing the learning curve associated with the business.  This not only streamlines the due diligence process but also enables buyers to make more informed decisions regarding the compatibility of their skills and expertise with the target business.Understanding the financials is a critical aspect of business ownership, and individuals with prior business experience, including management, typically possess a better understanding of financial principles. Understanding financial statements, the feasibility of investment decisions, and implementing sound fiscal strategies lead to the business’s success.
Risk management is also a part of business experience in which entrepreneurs with a history of business ownership have encountered challenges and uncertainties like what was experienced in 2008 and 2010. This exposure gives them the ability to mitigate risks effectively. During the business buying process, experienced buyers can identify potential pitfalls, develop contingency plans, and navigate uncertainties with a strategic mindset.Having business experience is paramount when buying a business. It provides a practical understanding of business operations, confidence in tackling issues, strengthens financial understanding, and improves risk management capabilities.

SBA Lender’s like Gesa Credit Union ask for a resume when applying for a loan. The credit union wants to make sure that a doctor doesn’t want to open a restaurant or a construction company owner doesn’t want to own an Adult Family Home.

If you find you have some management experience, but as much as you would like, I encourage you to look at franchise options as those provide additional business structures who help you along the way.

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Working capital is about to get more flexible with a NEW SBA Program

By Paul Long   7/3/2024

The SBA recently unveiled a pilot program designed to address a critical need for many small businesses, getting access to working capital. The new Working Capital Program (WCP) aims to provide easier access to funds for businesses struggling with cash flow, supporting growth and resilience.

All businesses face tight cash flow during their ownership. Daily expenses can outpace incoming revenue due to inflation or unexpected expenses. This can hinder the businesses’ ability to make payroll or pay vendors. The SBA WCP addresses this challenge by offering government-backed credit lines of up to $5 million.

As of the date of this article the current SBA loan programs include SBA Express Lines of Credit which are up to $500,000 and the Working Capital CapLine which goes up to $5 Million but lenders are nervous out this program due to the requirements placed by the SBA.

Here are the features of this new program:

  • Flexibility: A flexible annual SBA upfront guaranty fee. This allows businesses to customize the loan to their specific needs and reduces the cost of borrowing for shorter-term financing.
  • Focus on Assets: The program is categorized as an Asset-Based Working Capital Loan. This means businesses can leverage their existing assets, like inventory or receivables, as collateral to secure the loan.
  • Supporting Export and Domestic Sales: Unlike some existing programs, the WCP caters to both domestic and international sales under one facility.
    • Currently an export line of credit can only be used for exporting.
  • Home Energy Rebate Program Tie-In: For companies involved in the Inflation Reduction Act’s Home Energy Rebate Programs, the WCP offers an additional solution. It can help them scale up their capacity and mobilize services to meet the program’s demands.

Pilot Program and Next Steps

The WCP is currently in its pilot phase, with the official launch happening later in 2024. The SBA is finalizing program details, which will be available on their website. Lenders like Gesa Credit Union will participate in this new program.

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SBA Expert Paul Long has a Video for Everything

Since the week after his 16th birthday, Paul Long has been in the banking industry. After working his way from Wells Fargo Bank Teller to a district manager, Paul transitioned to business banking and on to SBA.

In this episode, Ray sits down with Paul to discuss how having a strong team helps you build a successful SBA division, how customer service and personal branding makes a world of difference, and the importance of giving value without expecting anything in return.

YouTube  https://youtu.be/6xgocvp150w

Apple Podcasts  https://podcasts.apple.com/us/podcast/sba-expert-paul-long-has-a-video-for-everything/id1485109358?i=1000615252694

Spotify https://open.spotify.com/episode/4R83mQAxsUnpP4IRTS4rNo?si=nSWJGvQzRFCUu2o3l0wNYw

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Paul on Will Talks Biz Podcast- Your Guide to SBA Loans

https://willtalksbiz.com/2023/03/15/your-guide-to-sba-loans/

“The lending process is a mystery, but I’m here to peel back the onion and dive deep into the details to help educate people.”

In this episode I welcome Paul Long, a 26-year banking industry veteran and SBA lending manager at a local credit union. He is on a mission to reveal the mysteries of the lending process and help small business owners understand it. Today he helps us by dispelling some of the myths and misconceptions about SBA loans.
After years of working in banking, Paul decided to focus on business banking, specializing in SBA loans. He found a love for educating business owners about the benefits of loan programs like SBA, which require lower down payments and longer terms than traditional loans. There are many financial resources small business owners tend to overlook, like getting help restructuring their balance sheets, purchasing equipment, acquiring another business, and purchasing commercial real estate.

Now Paul works for a local credit union as an SBA lending manager. He is passionate about helping businesses grow, expand, and acquire a business. He helps business owners bust the myth that SBA loans take too long, and educates them on the programs available, and understand how to qualify.

During our conversation Paul acts as a guide to the benefits of SBA loans and how they can help your small business grow.

In this episode, you will:

  • Discover the mystery behind the bank lending process.
  • Learn how to qualify for an SBA loan.
  • Get the facts on PPP and EIDL programs.

Paul is dedicated to helping businesses succeed, and offers his expertise and guidance on his website and LinkedIn.

“SBA loans provide lower down payments and longer terms to help small businesses grow, expand, and acquire a business.”

Episode Highlights:

[00:04:02] Paul: The biggest thing with SBA is you can have longer terms and lower down payments.

[00:05:57] What the government wants to do with SBA is to help small businesses grow, expand, and acquire a business. It is for owner occupied businesses. That creates tax revenue that creates, hopefully, more jobs for the business.

[00:06:40] For the most part, most businesses qualify. Anything adult related in a sexual nature is out. Anything religious is ineligible, anything that’s investor is ineligible.

[00:11:30] Paul: Make sure your numbers are in line. Make sure that you have up to date financials and your tax returns are filed. Every small business owner should have a relationship with a business banker or commercial banker. There’s pros and cons to each program, so you got to make sure that which program works for you.

[00:15:38] I primarily work with business owners in Washington, Oregon and Idaho. If you are in those states and you need support and help in those areas, definitely get in contact.

Connect with Paul:

https://www.linkedin.com/in/ptlong/

https://paultlong.com/

Connect with Will:

http://www.willtalksbiz.com/

Book I Can’t Read: A Guide to Success Through Failure

Email: Will@willtalksbiz.com

LinkedIn: https://www.linkedin.com/william-manzanares

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Paul on Scale your Small Business Podcast with Jillian Flodstrom

Today’s guest on this Scale Your Small Business episode is Paul Long, a business banking leader with 24 years of experience who works with business owners across Washington State. He is partnered with Gesa Credit Union, where he is their SBA lending manager. His goal is to assist small businesses in restructuring their balance sheet, purchasing equipment, or acquiring another business.
Here are the top takeaways from this episode:
– Business owners are coming to the banker too late. They get themselves into a contract that they can’t get out of and don’t even know if they can get the loan or not.
– Be prepared financially and build a relationship with the banker before you need to do something large.
– A big obstacle to growing your business is too much debt. If you’re thinking of growing, get out of the debt situation that you’re in. In some cases you can do that, but in most cases it’s not gonna work.
To access the full video, show notes and resources from this episode, please visit https://scaleyoursmallbusiness.org/blog/.
If you have any comments or questions about the podcast, please connect with us using one of the options below:
Website Link – https://www.jillianflodstrom.com Facebook Link -https://www.facebook.com/jillianflodstrom/ Instagram Link -https://www.instagram.com/jillianflodstrom/ Twitter Link – https://twitter.com/jflodstrom YouTube Link -https://www.youtube.com/c/JillianFlodstrom LinkedIn Link -https://www.linkedin.com/in/jillianflodstrom/ Pinterest Link -https://www.pinterest.com/jillianflodstrom/boards/ Clubhouse Link – jflodstrom