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Small Manufacturing Associations Applaud Newly Passed House ‘Credit Access’ Bill

The National Tooling & Machining Association, NTMA, and the Precision Metalforming Association, or PMA, are applauding the House of Representatives for passing H.R. 5297, the Small Business Lending Fund Act of 2010.

The Small Business Lending Fund Act aims to help support small businesses that are still struggling to access timely and sufficient credit from banks. The bill provides for government and private-supported investments in smaller banks and financial institutions, which would, in turn, increase their extension of credit to small businesses that are seeking loans.

Bill Gaskin, PMA president, issued the following statement on behalf of the "One Voice" partnership formed jointly by NTMA and PMA to advocate for the interests of small and medium manufacturers throughout the U.S.:

"We applaud the House of Representatives, and Congressman Gary Peters in particular, for seeking a solution to a problem that has proven very difficult to overcome: the ability of small businesses—especially in the manufacturing sector—to access credit from banks. Despite signs of recovery in the manufacturing sector and other areas of the economy, small businesses in our sector continue to find it challenging to obtain the credit they need to maintain and expand their operations.”

Without government action to address credit issues in the manufacturing sector, Gaskin argues, many PMA and NTMA member companies will continue to be stymied in accessing needed funds to hire new employees and purchase raw materials required to satisfy growth in customer orders. He went on to say that if small manufacturers cannot meet the demands of their customers as the economy begins to gather steam, then the overseas competitors will step in to fulfill orders that stateside firms cannot handle. In short, he noted, “American manufacturers will be denied the opportunity to partake in a broad-based economic recovery.”

The U.S. House of Representatives passed H.R. 5297 by a vote of 241-182. The bill, sponsored by Rep. Barney Frank, D-Mass., House Financial Services Committee chairman, aims to boost lending to small businesses by authorizing a fund of up to $30 billion that will be available to financial institutions with no more than $10 billion in assets. Bill co-sponsors say these funds can be leveraged to up to $300 billion in loans for small businesses. In addition, the bill provides another $2 billion to state lending programs that support small firms.

H.R. 5297, which has been amended since originally passing the House Financial Services Committee, establishes the small-business lending fund at the U.S. Department of the Treasury. Among the other provisions of Title 1 of the bill:

  • Requires applicant institutions to deliver to the appropriate federal banking agency a small-business lending plan describing how its business strategy and operating goals will allow it to address the needs of small businesses in the areas it serves.
  • Sets forth financial incentives for small-business lending by such institutions.
  • Instructs the secretary to require capital investment recipients to provide outreach and advertising in the appropriate language of the applicant pool using media outlets that target organizations, trade associations and individuals that represent or work within or are members of minority communities.
  • Establishes the Small Business Lending Fund Program as separate and distinct from the Troubled Asset Relief Program, or TARP. States that an institution shall not be considered a TARP recipient by virtue of a capital investment under this act.
  • Directs the secretary to study and report to Congress on the number of women- and minority-owned businesses that receive assistance as a result of the program.

The Small Business Lending Fund Act of 2010 bill will now head to the Senate for consideration, where manufacturers hope for quick action by July 4.


About NTMA

NTMA is the national association representing the precision custom manufacturing industry, which employs more than 440,000 skilled workers in the United States. Its mission is to help members of the U.S. precision custom manufacturing industry achieve business success in a global economy through advocacy, advice, networking, information, programs and services. Many NTMA members are privately owned small businesses, yet the industry generates sales in excess of $40 billion a year. NTMA’s nearly 1,600 member companies design and manufacture special tools, dies, jigs, fixtures, gages, special machines and precision-machined parts. Some firms specialize in experimental research and development work.

About PMA

PMA is the full-service trade association representing the $113-billion metalforming industry of North America. Its nearly 1,000 member companies include metal stampers, fabricators, spinners, slide formers and roll formers as well as suppliers of equipment, materials and services to the industry. Through advocacy, networking, statistics, the Educational Foundation, METALFORM tradeshows and MetalForming magazine, PMA helps lead innovative member companies toward superior competitiveness and profitability.
 

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