Impact of New $10M SBA Cap for Manufacturing on ETA Deals

December 04, 2025

by a searcher from Northwestern University - Kellogg School of Management in San Francisco, CA, USA

With the Made in America Manufacturing Finance Act recently passing the House and doubling the SBA loan cap from $5M to $10M (only for small domestic manufacturers: NAICS sectors 31-33, with production facilities fully in the U.S.) I’m wondering how that could reshape ETA, particularly self-funded search deals. Does this change primarily help platform buyers or individual acquirers when targeting manufacturing businesses? And from a buyer’s perspective, does this shift meaningfully change the competition or bidding environment for manufacturing deals vs non-manufacturing deals? Would love to hear what others in the community expect based on this development.

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Reply by a lender
from California State University, Sacramento in Seattle, WA, USA

Brad’s and William’s comments above resonate well. At this early stage I see this increase benefiting more add-on capacity (assuming existing operations are fully stabilized) and real estate acquisition or facility improvements. Unless you have solid industry experience and a personal PFS that’s proportional, I don’t envision lenders doing a $10M loan in one fell swoop if the guarantor isn’t personally strong enough for that size operation. Might be very interesting for those existing operators wanting to add-on and now lots more room. For those with engineering or manufacturing backgrounds, starting with a smaller acquisition using SBA, fully transitioning and stabilized, now with more room to strategically acquire for growth….that’s compelling to me. The idea that now you can buy two or three manufacturing companies at the same time with this additional headroom especially for the first time buyer/operator…I don’t see that happening. But I’m sure there will be a whole new crop of social media experts talking about how easy this is gonna be. Lots more to come and I’m excited to see how we’ll be applying the new capacity. redacted

Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

I think it will have a huge impact on the ability to get debt for manufacturing companies and will raise the size of companies that smaller self-funded searchers and investors can pursue. It also might put some pressure on multiples for smaller manufacturers. A few things to keep in mind here. Although we expect most lenders will take advantage of the $5 million CAP, there are many lenders that currently limit their goodwill exposure on SBA loans. So it will be interesting to see if those lenders raise that exposure for manufacturing companies or only do larger manufacturing deals with more collateral. Also, the larger the SBA 7A loan the more strength most lenders want to see from the Guarantors and post-closing liquidity as a fall back. So qualifying for the $10 million will likely take stronger guarantor balance sheets with most lenders or more investor support. Lastly, please keep in mind that the SBA 504 program currently offers additional borrowers of $5.5 million in SBA debt for buying additional properties or buying equipment. You cannot use SBA 504 debt to pay for the goodwill value of a business or for working capital, but you can use it for equipment and the owner-occupied real estate. If you maximize SBA 7A exposure, you cannot maximize SBA 504 exposure at the same time, but you can come back and borrow additionally with the SBA 504 program in the future. So for manufacturing businesses with owner-occupied real estate, you could use the $10 million with the SBA 7A loan program to finance the business purchase and then lease the real estate and come back 6 to 12 months later and use the additional availability on the SBA 504 program to purchase the real estate then. This is definitely going to open up more options. The hope is if this goes well the SBA will eventually increase the borrowing limits for other loans as well. Hopefully the Senate passes it shortly and it is almost assured the President will sign it with his manufacturing push. If you have any questions on financing options you can reach me here or directly at redacted

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