Peters Introduces Bill to Scale-Up Investments for Small Advanced Manufacturing Businesses
WASHINGTON, DC – U .S. Senator Gary Peters (MI), a member of the Small Business and Entrepreneurship Committee, announced today that he joined four of his colleagues to introduce the Scale-Up Manufacturing Investment Company (SUMIC) Act of 2015, legislation that increases access to capital for entrepreneurs looking to scale-up and commercialize their advanced manufacturing innovations. The legislation was also introduced by Senators Cory Booker (NJ), Kirsten Gillibrand (NY), Patty Murray (WA) and Chris Coons (DE).
“Access to capital is a significant obstacle for startups and entrepreneurs who want to grow, commercialize and launch their innovative products,” Senator Peters said. “Small businesses are the backbone of our economy, and we need policies that help them invent and build their products here at home with American workers. This new program at the Small Business Administration will encourage private investment to help our advanced manufacturing sector thrive and create good-paying middle class jobs in Michigan and across the country.”
“Small businesses are the backbone of the U.S. economy and a tremendous engine for innovation and job growth,” Senator Booker said. “But small manufacturing firms often struggle to find the capital to finance expansion plans and develop and implement new technologies that can help their businesses grow and create jobs. While we are falling short, our competitors are investing in American homegrown advanced manufacturing firms, and in many cases moving their high-quality jobs and operations overseas. To remain competitive and keep innovative technologies and capabilities in the U.S., the federal government must partner with the private sector to increase access to capital for all entrepreneurs. This bill invests in the potential of entrepreneurs in the advanced manufacturing sector by providing them with the funding they need to scale-up and commercialize new technologies and create jobs for Americans.”
“If we want our economy to grow and create more jobs, we need to give small businesses the tools they need to turn their innovative ideas in new business opportunities, expanding their manufacturing operations instead of being forced to outsource that work in order to stay competitive,” Senator Gillibrand said. “The Scale-Up Manufacturing Investment Company Act will provide critical resources and opportunities for local entrepreneurs and small businesses to bring their innovations to market, and ensure that new technologies are made here in America.”
“If we want to support sustainable economic growth in the U.S., we need to do it from the middle out, not the top down—and we need to make sure our emerging manufacturing companies can access the capital they need to grow and succeed,” Senator Murray said. “I’m proud to support this bill to support public-private investment partnerships and assist small and mid-sized manufacturers so that they can continue to innovate and expand their manufacturing base to create more good-paying jobs for workers in Washington state and across the country.”
“America’s small and medium-sized companies are among the most innovative in the world and are critical drivers of our economy,” Senator Coons said. “Too often, though, young manufacturing companies can’t access the same resources available to large, established firms, forcing them to move manufacturing and jobs overseas to secure the investment they need to thrive. We must do everything we can to help these innovative companies grow and prosper here at home so they can create American jobs and grow our economy. I’m proud to join Senator Booker in this effort and support his Scale-Up Manufacturing Company Act of 2015.”
Lack of access to capital pushes emerging manufacturing entrepreneurs to move their advanced manufacturing technologies abroad to other nations that provide financing opportunities for small businesses looking to commercialize their innovations. This migration drains the U.S. of innovative manufacturing capabilities and causes us to lose out on high-paying, high-skilled manufacturing jobs that accompany the commercialization of new ideas.
Small businesses employ more than 50 percent of the U.S. workforce and have generated more than 65 percent of net new jobs since 1995. Small businesses have also proven themselves to be hotbeds of innovation. To survive in today’s increasingly competitive economy, entrepreneurs often must expand quickly, growing on their own or in collaboration with larger firms to help scale-up their innovations into commercialized products which often require highly complex, advanced manufacturing capabilities that demand more time and capital to scale than nonproduction firms. However, our nation’s financing mechanisms have not kept up with this changing landscape and make it difficult for these companies to find the capital needed to demonstrate viability of their technology at a commercial scale.
The SUMIC Act creates a program that allows private investment firms to leverage funds provided by the government to help emerging manufacturers commercialize their products. The program, modeled on the Small Business Administration’s (SBA) Small Business Investment Companies (SBIC) program, would allow approved participating investment firms to invest in securities and issue debentures to raise capital that would then be invested into emerging manufacturers’ businesses. Any fees, interest, and profits received from the debentures and securities investments would offset the costs of the program.
The SUMIC Act is supported by the following organizations:
- Information Technology and Innovation Foundation
- National Venture Capital Association
- Association for Corporate Growth
- Small Business Investor Alliance
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