Velazquez Seeks Capital for Small Manufacturers

Washington, DC – Legislation introduced today by Rep. Nydia M. Velázquez (D-NY) would help small and emerging manufacturers access capital to grow their operations, fuel innovation and, ultimately create new, well-paying jobs. The "Scale Up Manufacturing Investment Company Act", H.R. 3468, would create a new initiative at the Small Business Administration (SBA), channeling investment capital to small manufacturing firms.

"Small manufacturers face unique challenges in commercializing their products and developing systems to mass produce them," Velázquez said. "This legislation would create a new option for small companies that are seeking capital to scale up their operations."

Under the legislation, up to $1 billion a year would be made available by the SBA to private investment companies. Pairing this leverage with private capital, these firms would, in turn, invest in small manufacturers, helping them get through critical, early growth stages of the business cycle, expand their operations and, ultimately, hire more American workers.

"Expanding the manufacturing sector is one of the most effective ways to keep good jobs here, in the United States," Velázquez noted. "We are seeing a manufacturing renaissance in this country and, for the long term health of our broader economy, we must continue promoting this trend."

A companion measure to the legislation is being sponsored in the Senate by Senator Cory Booker (D-NJ).

"Small businesses are the backbone of our economy and a tremendous engine for innovation and job growth," Sen. Booker said. "But small manufacturing firms often struggle to find the capital to finance expansion plans and develop and implement new technologies. To remain competitive and keep innovative technologies and capabilities in the U.S., the federal government can more effectively partner with the private sector to increase access to capital for all entrepreneurs in the advanced manufacturing sector through this legislation."

Because of their capital intensive needs and use of new technology, small manufacturers frequently encounter what economists call a "valley of death", a period in their early growth when it is difficult move past the nascent startup phase and enter mass production. For a small manufacturer, a capital infusion at this stage can make the difference between going under or growing into a new venture that creates new jobs.

"I've seen firsthand in Brooklyn and New York how small manufacturers can create job opportunities and revitalize a neighborhood economy," Velázquez added. "This legislation will build on that success, helping harness American ingenuity to fuel job growth."

The legislation has been referred to the House Committee on Small Business, of which Velázquez is the top Democrat. It is cosponsored by eleven other House Members.

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