S. 2411: Scale-Up Manufacturing Investment Company Act of 2025

The Scale-Up Manufacturing Investment Company Act of 2025 aims to enhance the manufacturing sector in the United States by creating a program that financially supports small and emerging manufacturers. Here’s an overview of the main components of the bill:

Purpose and Context

The bill underscores the importance of the manufacturing sector for job creation and economic competitiveness, noting that:

• The U.S. manufacturing industry supports about 17.6 million jobs and contributes to 12% of the GDP.
• Access to capital is crucial for growth and innovation in manufacturing.
• Small manufacturers face challenges in scaling production, often leading them to establish operations overseas.
• Countries like China and Germany provide incentives for manufacturing, making it difficult for U.S. firms to compete.

Establishment of the Scale-Up Manufacturing Investment Company Program

The bill proposes to establish a new program under the Small Business Investment Act known as the Scale-Up Manufacturing Investment Company (SUMIC) Program. This program will focus on:

• Providing financial assistance for small and emerging manufacturers to build first commercial production facilities and implement new technologies.
• Offering leverage to private investment funds that support such manufacturing projects.

Program Administration

The program will be administered by an Associate Administrator who will oversee various aspects, including:

• The application and selection process for investment funds to participate in the program.
• Monitoring the distribution and use of funds to ensure compliance and effectiveness.

Investment Fund Participation

Investment funds interested in participating must:

• Apply for a license, demonstrating sufficient private capital and a commitment to the program.
• Be assessed based on their investment experience, track record, and focus on small manufacturers.

Leverage and Funding

The government may provide leverage for every dollar of private capital raised by participating funds, with specific limits:

• A maximum of $1 billion in total leverage across all funds could be provided in a fiscal year.
• No individual fund can receive more than $500 million in leverage.

Investment Guidelines

Funds participating in the program must use the leverage for debt and equity investments in qualifying small and emerging manufacturers. Key aspects include:

• Up to 50% of any investment in a small manufacturer can consist of the leverage received from the program.
• No single investment should exceed 10% of the total capital of the fund.

Reporting and Oversight

Participating funds will be required to issue reports and undergo examinations to ensure compliance with regulations and effective use of funds.

Goals and Outreach

There will be an emphasis on increasing investments in businesses owned by socially and economically disadvantaged individuals, as well as those owned by women, veterans, and individuals with disabilities.

Establishment of Advisory Council

The bill allows for the creation of a Scale-Up Manufacturing Investment Company Credit Council to provide advice on the program’s implementation and to oversee its ongoing efficacy.

Regulations and Compliance

The Administrator will have the authority to issue necessary regulations to carry out the program’s provisions and to ensure compliance by participating funds.

Relevant Companies

• GE: General Electric has a significant focus on manufacturing technologies, making it a potential beneficiary of increased investment in the manufacturing sector.
• BA: Boeing, as a manufacturer in aerospace, could see impact on its supply chain and production financing under this program.
• TM: Toyota Motor Corporation may find itself impacted by new investments directed toward automotive manufacturing technologies.