Financing conditions are one of the primary catalysts behind M&A momentum in the lower middle market. In 2026, one of the most consequential developments for U.S. manufacturing transactions came not from private credit markets, but from Washington D.C. 

In late March, the U.S. Small Business Administration announced a new “Made in America Loan Guarantee,” increasing the SBA guarantee on qualifying manufacturing acquisition loans to 90%, up from the traditional 75% level under standard SBA programs. While the stated objective is to encourage reshoring and domestic production, the downstream impact for buyers and sellers of lower middle market manufacturing businesses is significant. 

For buyers focused on U.S. manufacturing acquisitions, this shift has practical, deal level implications.“SBA‑backed loans remain a popular tool for our buyers, often requiring just ~10% down while guaranteeing 75% of the loan for partner banks. With the SBA’s new change, that guarantee can now increase to 90% for certain manufacturing transactions, with some related fees waived, a meaningful tailwind for buyers pursuing U.S. manufacturing acquisitions,” commented Max Friar, Founder and Managing Partner of Calder Capital.

SBA‑backed loans have long been a popular financing tool for entrepreneurs and independent sponsors because they reduce lender risk while allowing buyers to pursue acquisitions with relatively modest equity contributions. Historically, the SBA has guaranteed 75% of the loan balance, shifting a large portion of credit risk away from SBA partner banks. 

Under the SBA’s new Made in America initiative, that guarantee increases to 90% for eligible manufacturing businesses, materially improving the risk profile from a lender’s perspective. 

Jeff Kleinschmidt, Senior Vice President and SBA Group Sales Manager at Old National Bank noted, “It always helps to create tools to mitigate a lender’s risk, and this increase from 75% to 90% will certainly do just that. More importantly, SBA just announced the bifurcation of the SBA 7a and SBA 504 loan programs, effective July 4, 2026.  Prior to this change, both loan programs aggregated the maximum amount of SBA funding to $5 million, but now, a separate $5 million borrower limit will apply to both the SBA 7a and SBA 504 loans programs which should free up additional capital for borrowers.”

Higher SBA guarantees increase lender willingness to finance capital-intensive businesses, including manufacturers with meaningful equipment bases, complex working‑capital dynamics, or customer concentrations that might otherwise raise credit concerns. When qualified buyers also consider SBA programs often only require down payments of approximately 10% of the purchase price, the Made In America initiative creates an attractive financing environment. 

For individual entrepreneurs and lower middle market investors, the result is greater purchasing power and increased flexibility when structuring acquisitions. 

Kleinschmidt added, “I don’t think [the higher guarantee] will have much impact on equity requirements, leverage or any other structural components since we are accustomed to doing higher leverage transactions. It may make a small psychological difference to an underwriter on a deal-specific basis, but may not have the same impact as increasing the dollar caps for SBA lending in general.” 

The enhanced guarantee arrives alongside additional manufacturing focused incentives. In fiscal year 2026, the SBA has waived certain loan fees for small manufacturers, including 0% upfront guarantee fees on qualifying manufacturing 7(a) loans up to $950,000. When combined with higher guarantees, longer amortizations, and reduced upfront costs, these changes represent one of the most buyer‑friendly manufacturing financing environments in years. For qualified buyers, this alignment improves certainty of close and cuts cost out of the acquisition process.  

Sam Scharich, Calder Capital’s Buy-Side Managing Director, stated, “Financing for manufacturing deals just became even more attractive. At a practical level, this does not change what makes a good deal, but it does change how deals can get done. With a higher guarantee, banks are more comfortable with lending and may be more aggressive. Deal structures become more flexible and while this is likely to lead to more deals getting done, it can also drive higher valuations.” 

Calder Capital advises buyers and sellers across the manufacturing sector, from niche fabricators and CNC machining shops to tool and die businesses and diversified industrial platforms. In 2026, we have been seeing increased buyer interest in U.S. manufacturing businesses as financing conditions improve and domestic production remains strategically attractive. 

As with any acquisition strategy, outcomes favor buyers who prepare early, understand lender priorities, and work with advisors who can align capital strategy with deal execution. 

Exploring a manufacturing acquisition? Connect with Calder Capital’s Buy-Side team. 

About Calder Capital:

Founded in 2013, Calder Capital is a cross-industry mergers and acquisitions advisory firm with offices across the United States. Calder provides valuation, sell-side, and buy-side services. We are nationally recognized for excellence in advising $1-100M enterprise value transactions in manufacturing, construction, distribution, and business services. Calder serves business owners, entrepreneurs, family offices, financial buyers, and investors. Learn more at www.CalderGR.com. 

Notice: Calder Capital, LLC is not affiliated with any similarly named organizations or entities. To verify communications from our firm, visit our website or contact [email protected].