Small Manufacturers Driving Job Creation, Economic Growth
Ed note: This was originally published on Open for Business, the official blog of the SBA
Made in America is hot. More than 400,000 manufacturing jobs have been created since the start of 2010 and there are currently about 229,000 job openings in the manufacturing sector, according to data from the Labor Department.
America’s small manufacturers are a critical part of that. According to BLS and Census data, 98 percent of America’s manufacturing firms are small. More than one in three Americans who work in manufacturing, work at a small business.
Everyone from the President on down has been working very hard to make sure these firms have the tools they need to grow and create jobs.
For example, in 2010, President Obama signed into law the Small Business Jobs Act. One of the most important provisions was increasing the limit on SBA loans from $2 million to $5 million. The higher loan limits directly helped nearly 2,500 small businesses – including nearly 450 small manufacturers – with access to over $10.2 billion to help buy new buildings, buy more equipment, and hire more workers.
We’re building on that momentum by taking even more steps to help small manufacturers.
For example, a recent study shows that access to a supply chain can help employers increase revenues by more than 250 percent and create 150 percent more jobs. That’s why SBA is working with America’s biggest companies to develop easier access to those critical supply chains.
In addition, the federal government itself is working to make sure we meet the goal of 23 percent of federal contract dollars going to small businesses, including small manufacturers. Already, we have had two consecutive years of increases, with nearly $100 billion going to small businesses last year.
Also, a recent report on the state of capital access from the Manufacturing Extension Partnership (MEP) – a program of the U.S. Department of Commerce’s National Institute of Standards and Technology - shows a lack of available capital to manufacturers has “restricted the ability of many small manufactures to grow and compete.” We’ve heard this and have developed new tools to support access to capital including a redesigned Supply Chain loan program (CAPLines) that provides low-cost, short-term financing to help small contractors and sub-contractors get the working capital they need to fulfill the contract, including creating jobs in the short-term.
And finally, for those manufacturing small businesses that are poised for significant expansion and growth, the Small Business Investment Company (SBIC) program has been a great source of long-term, patient capital. It had a record year in 2011, and over the past several years, more SBIC dollars from the debenture program have gone to manufacturing than any other sector.
Through our continued work with the White House Office of Manufacturing Policy, the MEP, and many other partners, we will continue to help manufacturers create good jobs here over the long term.