Washington, DC - Congressmen Sander Levin, John Dingell, and Gary Peters introduced legislation yesterday evening to help manufacturing firms access the financing they need to expand, diversify, and hire new workers.  Levin, Dingell, and Peters were joined in introducing the legislation by Financial Services Committee Chairman Barney Frank, whose committee will have jurisdiction over the legislation.  Additional original co-sponsors include Reps. Kanjorski, Dennis Moore, Fudge, Kildee, Pascrell, Lipinski, Doyle, Etheridge, Butterfield, Tim Ryan and Schwartz.  

While the US economy has shown signs of recovery, too many manufacturers are unable to access the credit they need to sustain and expand their business.  The manufacturing sector was particularly hard hit by the recession and financial crisis, leaving many firms with diminished cash flow and depleted collateral.  As a result, even where banks have the capital to lend, many viable manufacturers are unable to qualify for the loan they need to recover and support our national recovery.

“Manufacturers everywhere, and especially in Michigan, are rapidly transforming to remain competitive in the new economy.  Unfortunately cash flows and collateral have been hit hard by the recession making it increasingly difficult for firms to access the capital they need to expand, diversify, and hire,” said Rep. Levin.  “We are talking to the Administration as they expand their small business proposal about provisions that directly address the collateral and cash flow short falls that are preventing too many firms from accessing credit.  This legislation represents a model that is working today to help firms with diminished collateral values access the credit they need.”

"The Manufacturing Modernization and Diversification Act will go a great way toward freeing up credit for small and medium-sized manufacturers," said Rep. Dingell. "Not only will the loans facilitated by this legislation allow our manufacturing base to continue present operations, but it will also enable it to make investments in the future. By facilitating diversification into new industries, such as clean energy, the Manufacturing Modernization and Diversification Act will ensure the jobs of the future are created and maintained in the United States."

“During the field hearing we held on small business lending in November and in conversations with business owners throughout Southeast Michigan, I hear time and again that a lack of small business lending is a major impediment to creating jobs in Michigan,” said Rep. Peters.  “Large banks have admitted they are not lending to Michigan manufacturers.  Unlocking capital for small businesses is critical to creating a climate of job creation in Michigan.”

The Manufacturing Modernization and Diversification Act [H.R. 4629] utilizes a credit support model that the Michigan Economic Development Corporation has successfully used to help manufacturers diversify their businesses.   The bill would give states resources to partner with financial institutions to directly address the cash flow and collateral problems that are preventing too many manufacturers from accessing credit, and complements President Obama’s call to expand access to credit as central priority of economic recovery efforts.

Six governors recently wrote to Treasury Secretary Timothy Geithner calling on the Administration to make funding available for such a program.

 

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