Finally, a Loan Program Built for Small Manufacturers

For years, small and midsize manufacturers have faced a familiar problem: cash flow that moves in cycles, but financing that doesn’t. Inventory, raw materials, and payroll all demand liquidity long before revenue arrives. Yet traditional bank loans often require steady profits and pristine credit histories — an impossible combination in industries defined by seasonality and contract-based income.

That’s why the Small Business Administration’s new Manufacturers’ Access to Revolving Credit (MARC) program has been attracting attention since its October 1 launch. Built specifically for manufacturers, MARC expands the SBA’s flagship 7(a) program to include revolving lines of credit and flexible term loans, which is a first for the sector.

What the Program Offers

The MARC loan program allows borrowing up to $5 million, with 85% SBA guarantees for loans under $150,000 and 75% for larger amounts. Revolving lines can last up to 20 years (10 years revolving and 10 years term-out), while traditional term loans cap at 10 years.

Unlike older SBA programs that relied on historical performance, MARC loans can now be underwritten using projected cash flows—a critical shift for manufacturers scaling up or taking on new contracts. That means a growing firm no longer needs three years of static profits to qualify.

According to SBA Procedural Notice 5000-870260, which supplements the agency’s standard SOP 50 10 8, lenders now have guidance to evaluate manufacturers differently—factoring in production cycles, inventory timelines, and supply-chain needs rather than treating them like retail borrowers.

In practice, this means a parts maker with a big new contract can use anticipated receivables to justify a line of credit, or a small fabrication shop can finance raw materials for a seasonal surge without draining its reserves.

Why It Matters

Manufacturing is capital-intensive by nature. Machines, materials, and labor absorb cash for months before a single product ships. The MARC program aims to close that liquidity gap by providing credit that turns with production cycles,rather than static term loans that strain cash flow.

Its timing is also significant. As reshoring and infrastructure investment continue to accelerate in 2025, access to flexible working capital is becoming a defining competitive advantage for small producers. The SBA has already sweetened the deal with fee waivers through FY2026 for loans up to $950,000 and eliminated annual fees on 504 manufacturing loans.

For lenders, MARC’s high guarantees and clear framework reduce credit risk, which could widen access in underserved regions. For borrowers, the ability to finance inventory swings and ramp up production, without relying solely on expensive private debt, could be transformative.

In short: MARC isn’t just a loan program; it’s an experiment in rebuilding the financial infrastructure for domestic manufacturing.

What to Watch

The upside is significant, but so are the caveats.
Only businesses classified under NAICS codes 31–33 (the official definition of manufacturing) qualify. Wholesalers, logistics companies, and service-based businesses do not.

Funds can’t be used for floor-plan financing, ownership changes, or to pay delinquent taxes. And while revolving lines offer flexibility, they come with annual reviews: if a company’s financials deteriorate, lenders can convert the line into a fully amortizing term loan.

The use of projected cash flows is both an advantage and a risk. It opens the door to growth-stage financing but also invites optimism bias. If projections don’t materialize, borrowers could find themselves overextended in a tightening credit environment.

That risk is real. The SBA’s broader 7(a) portfolio has seen rising defaults over 2024–2025, prompting some banks to tighten terms. If those trends continue, lenders may interpret “flexibility” more conservatively than advertised.

How Small Manufacturers Can Prepare

Now that the program is live, the best time to prepare is today.

• Audit your financials. Clean books and accurate cost accounting remain non-negotiable. Inconsistent records can derail SBA eligibility before the application even begins.
• Build credible projections. The SBA now allows future cash flow modeling—but only if it’s supported by contracts, invoices, or clear historical performance.
• Confirm your NAICS classification. If your company overlaps with distribution or assembly, make sure your primary code still qualifies under 31–33.
• Coordinate your capital stack. MARC loans can coexist with 504 or conventional loans. Work with your CPA to plan the order and purpose of each funding source.
• Engage lenders early. Community banks and Certified Development Companies (CDCs) are still implementing MARC processes. Early conversations help position your business ahead of the curve.
  
  

Done right, MARC could become one of the most effective SBA tools for modern manufacturers, especially smaller shops that have long struggled to secure working capital on fair terms.

But like every government-backed initiative, execution will determine impact. The opportunity isn’t simply cheaper credit—it’s using this new flexibility to create financial certainty in an industry defined by uncertainty.

Sources

U.S. Small Business Administration

Manufacturing Dive

National Association of Government Guaranteed Lenders

U.S. Department of Labor, NAICS Definitions

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