Commercial Insights

Six trends reshaping manufacturing and what they mean for small manufacturers

As manufacturers adapt to evolving supply chains, workforce pressures and rising capital needs, the SBA’s MARC program may offer new flexibility to support growth.

Key takeaways

• Manufacturing businesses face growing pressures from supply chain changes, workforce shortages, inflation and technology investments.
• Domestic production trends are creating new opportunities for manufacturers and suppliers across the U.S.
• Building resilience often requires greater access to working capital and flexible financing.
• The SBA’s MARC program was designed specifically for manufacturers and offers financing options to support growth, inventory needs and operational expansion.
• Eligible businesses may be able to use MARC financing to strengthen cash flow, fulfill orders and invest in long-term competitiveness.

For small manufacturers, navigating today’s business environment requires balancing opportunity with uncertainty. While shifting supply chains, rising demand for domestic production and new technologies are creating avenues for growth, persistent challenges around working capital, labor shortages, inflation and operational costs continue to pressure margins.

“Every business is facing these pressures, regardless of industry or size, but small manufacturers may experience their impact more acutely,” said Taylor Franco, head of SBA Large Dollar Originations at Regions Bank. “The challenges are real, but they are far from insurmountable. Small businesses should stay informed about the forces shaping their operating environment while also exploring the resources and solutions available to help address their unique needs.”

Six key trends shaping the future of manufacturing

1. Structural demand reconfiguration – Supply chains are shifting toward domestic and regional production, driving investment into manufacturing in the United States, particularly in the Southeast. Tier 2 (companies that supply direct vendors) and Tier 3 (companies that provide raw materials or basic inputs to Tier 2 suppliers) businesses are increasing their participation in localized supply chains. Suppliers overall remain dependent on large original equipment manufacturer (OEM) ecosystems.
2. Shift to resilient operating models – Manufacturers are redesigning supply chains to be more resilient and reduce reliance on single-source or offshore inputs. This is leading to higher inventory, supplier diversification and localized sourcing strategies. While this may improve resilience, there is also a structurally higher cost base, increasing demand for working capital and inventory/asset-based lending.
3. Sustained margin pressure – Input costs, labor inflation and limited pricing power are constraining profitability, as manufacturers contend with changes in U.S. trade policy and persistent global supply chain disruptions that contribute to revenue volatility. Small operators with lower purchasing and pricing power can be more sensitive to cost and demand shocks, and there is heightened credit risk where owners cannot pass cost inflation on to clients.
4. Workforce and operating constraints – Labor shortages and wage inflation continue to strain manufacturing operations. Demographics are adding pressure, with 26% of the manufacturing workforce slated to retire by 2030, which may encourage companies to invest in automation to offset risk.
5. Tech and automation transformation – Automation, AI and advanced technologies are becoming essential to remaining competitive – but adopting the technology can be capital intensive, particularly for small operators. The cost for implementation can contribute to debt service coverage ratio (DSCR) issues, which is a key metric used to measure a factory or manufacturing company’s ability to cover its debt payments using its operating income.
6. Policy, interest rates and credit – The second quarter Fed Senior Loan Officer Opinion Survey (SLOOS) on Bank Lending Practices report indicated modest credit tightening – but the SBA may offer increased support for small manufacturers in need of capital, in part through its new MARC program.

SBA manufacturer’s access to revolving credit (MARC) program

As manufacturers look for ways to strengthen resilience and expand capacity, the SBA’s new MARC program may provide a valuable financing solution.

Launched in October 2025, the MARC program is geared toward manufacturers. MARC lending is intended to help small manufacturers manage cash flow, buy materials, fulfill orders, expand capacity and achieve growth with less friction.

“SBA created the MARC program because small manufacturers often need ongoing, flexible working capital – not just one-time financing,” said Franco. “MARC offers flexible, long-term revolving lines of credit that can help with working capital, inventory purchases and scaling, all of which can help strengthen supply chains and boost domestic production.”

What to know about MARC

Which businesses can benefit from MARC?

Businesses classified with these NAICS codes may be eligible for MARC financing:

How is MARC different than other SBA working capital options?

MARC loans offer up to a ten-year revolving line of credit, followed by a term out period equal to or greater than the revolving period.

How is MARC financing structured?

MARC loans are structured as revolving lines of credit.

Ready to help

Regions’ team of dedicated Small Business Administration Bankers could provide the flexibility and funding you need to finance your small-business growth. If you’re ready to learn more, contact a Regions SBA banker today.