According to a report by the Government Accountability Office (GAO), the Department of Commerce is not planning to implement a loan guarantee program aimed at stimulating technological innovation among small and medium American manufacturers.
To invest in innovative manufactured goods and processes, improve the competitiveness of the United States, and help meet the capital needs of American manufacturers, the Reauthorization of America Act of 2010 creating opportunities to promote excellence in Technology, Education, and Science (COMPETES) directed the Secretary of Commerce to establish the Innovative Technologies in Manufacturing (ITM) program. The ITM program aimed to provide loan guarantees to small and medium manufacturers for the use or production of innovative technologies. The Economic Development Administration (EDA) of Commerce is responsible for implementing the program.
EDA officials provided several reasons for not implementing the program:
EDA officials told GAO they expect limited demand from small and medium-sized manufacturers for loans under the ITM program. However, they said it would be useful to assess the potential demand for loans, as the United States entered an economic recession around 2020 and the recent coronavirus disease 2019 (COVID-19) pandemic caused changing conditions in manufacturing and the world. Supply Chain.
EDA officials also said it would be difficult to run the ITM program without duplicating alternative loan programs available to help businesses, including those in innovative manufacturing, such as the 7(a) loan program. of the Small Business Administration (SBA).
In addition, EDA officials expressed uncertainty about the level of interest and participation potential lenders would have in the ITM program if the EDA were to implement it, for example, because potential lenders know and may be more likely to continue participating in the SBA. loan programs.