Best Practices: Key Highlights of the 7(a) Manufacturer’s Access to Revolving Credit (“MARC”) Loan Program

On September 4, 2025, the Small Business Administration (“SBA”) issued SBA Procedural Notice 5000-870260 to announce the creation of the new 7(a) Manufacturers’ Access to Revolving Credit (“MARC”) Loan Program in order to support America’s small business manufacturers by providing expanded access to credit specifically for working capital, and effective today, October 1, 2025,  lenders may begin submitting MARC applications to the SBA.  This article is intended to highlight key features of the MARC Loan Program, and the complete loan program details can now be found in Appendix 13 of SOP 50 10 8.

MARC loans are available only to those businesses that: (i) are engaged in manufacturing (See NAICS sectors 31, 32, or 33 where 31, 32, or 33 are the first two (2) digits of the business’ 6-digit NAICS code); and (ii) meet the eligibility requirements set forth in SOP 50 10 8, Section A.

Benefits (flexibility and minimal red tape):

• Contain features of both Standard SBA 7(a) term and SBA Express revolving loans
• Structure as a term loan or revolving line of credit
• Use for a variety of short-term working capital needs – purchase inventory, start new projects, scale operations, and take on new customers
• Leverage applicant’s equity in an existing facility or equipment
• Use in conjunction with other SBA and conventional commercial loans

Loan Terms:

• Maximum loan amount:
  • $5,000,000
• Maximum guaranty percentages:
  • 85% for loans < or = $150,000
  • 75% for loans > $150,000
• Underwriting:
  • No minimum required equity injection based on use of proceeds, but the lender must determine if the applicant has sufficient invested equity
  • Must address applicant’s ability and likelihood to repay the loan from the cash flow of the business (and not from any expected recovery from the liquidation of collateral) and past performance by documenting the following:
  • Applicant’s debt service coverage ratio must be = or > than 1:1 on a historical basis; or = or > than 1:1 within two (2) years from first disbursement if relying on projections
• Collateral:
  • Use commercially reasonable and prudent practices to identify collateral that conforms to procedures at least as thorough as those used for their similarly-sized non-SBA guaranteed commercial loans
  • At a minimum, must include a security interest on applicant’s business assets (including titled equipment and real estate), with specific exceptions for vehicles and trading assets
• Term Loan:
  • Maximum maturity of 10 years.
  • May be structured with interest-only period,
  • May be sold on the secondary market once the interest-only period ends
  • May take a security interest in applicant’s trading assets
• Revolving Loan:
  • Maximum maturity of 20 years, but revolving period must be < or = 10 years or less and the loan must convert to a fully-amortizing loan with an additional repayment term < or = 10 years
  • If the term is < 12 months, loan may be structured without a term-out period
  • If the term is > 12 months, loan must be structured with a term-out period that is at least as long as the draw period, with no draws permitted during the term-out period.
  • May not be sold on the secondary market
  • Must contain a provision to permit the lender to amortize the loan in the event that the applicant does not meet the program requirements post-closing
  • Lender decides how to administer disbursements
  • Must take a security interest in applicant’s trading assets

It is clear from SBA Administrator Kelly Loeffler’s statement when the MARC program was announced that the SBA is keenly focused on empowering small businesses to bring back Made in America: “With 98% of American manufacturers classified as small businesses, the new MARC Loans represent a powerful source of targeted capital for those who are growing our nation’s production.”  For more information regarding the new MARC Loan Program, or SBA guaranteed lending in general, please contact the attorneys at Starfield & Smith at info@starfieldsmith.com or call (215) 542-7070.