Business Insights: Supercharging Illinois Manufacturers
Manufacturing is part of who we are in Illinois. From food processing, to machinery, to pharmaceuticals, and advanced technology, Illinois manufacturing is shaping local economies.
The federal government is doubling down on support for the manufacturing sector in 2026 with targeted tax benefits and increasing access to capital through the Small Business Administration 504 loan program.
These initiatives are designed to turbocharge manufacturing in the new year. SomerCor is proud to act as the bridge to these growth opportunities for small to mid-size manufacturers in Illinois, in partnership with organizations like IMEC and the Technology & Manufacturing Association.
Made in America Manufacturing Initiative
The U.S. Small Business Administration (SBA) launched the Made in America Manufacturing Initiative, in part to increase access to capital for manufacturers through the SBA 504 loan program. The SBA 504 loan provides a long-term, fixed, below-market rate option for manufacturers owners to build, buy, and refinance fixed assets like commercial real estate and heavy equipment.
Additionally, the maximum SBA loan amount per manufacturing project is $5.5 million, compared to $5 million for other industries. There is currently legislation under consideration in Congress to increase this to $10 million.
The SBA 504 loan is a great fit for manufacturers seeking to expand, construct, or renovate a new or existing facility — personalized for optimum efficiency and the flexibility to grow. One SomerCor client, a paper product manufacturer, used the 504 financing to build a 162,000sqft state-of-the-art space that merged all operations under one roof.
Another borrower, a repeat client that provides custom metal fabrication and finishing services, used the SBA 504 program to purchase a third location and heavy equipment to increase production.
Lower Interest Rates for Manufacturers in FY26
To maximize support for manufacturers (primary NAICS Code in sectors 31, 32, and 33), the SBA enacted fee waivers for SBA 504 loans approved between October 1, 2025, and September 30, 2026.
- Manufacturers will pay 0% on the SBA’s upfront guaranty fee for 504 loans, including those used for refinancing.
- The annual servicing fee on the outstanding balance of the loan is waived for manufacturers.
Interest rates for manufacturing projects funded in FY26 will be approximately 25 basis points lower than for other industries. This creates a unique opportunity for manufacturers to access financing for growth, while keeping more capital in their business.
Game-Changing Tax Breaks for Manufacturers
In addition to SBA initiatives, the 2025 Budget Reconciliation package, signed into law on July 4, 2025, includes provisions specifically to support the manufacturing sector:
- Qualified Business Income (QBI) Deduction — The Section 199A deduction, which allows eligible business entity owners to deduct up to 20% of their QBI, is now permanent.
- Accelerated Depreciation and Expensing — Section 179 was updated to increase expensing limit to $2.5MM per year, with a phase out starting at $4MM, both indexed for inflation.
- New Section 168(n) — Allows 100% expensing for certain production properties, including manufacturing facilities.
Manufacturers should connect directly with a tax professional to learn about taking advantage of these tax benefits.
The SBA Made in America Manufacturing Initiative along with the recent changes to the federal tax code make it more attractive and feasible for manufacturers to buy and build here at home. At SomerCor, we’re proud to stand alongside our state’s makers by helping them access the capital they need to invest, grow, and hire.
— Elisabeth Williams — EVP, SBA 504 Loan Operations at SomerCor