On February 14, 2024, the White House hosted a meeting of small business leaders, trade association professionals, investors, and federal officials, for a roundtable discussion concerning reforms that the Biden-Harris administration has made to the Small Business Investment Company (SBIC) program.
According to the Small Business Administration (SBA), “An SBIC is a privately owned company that’s licensed and regulated by the SBA… The SBA doesn’t invest directly into small businesses, but it does provide funding to qualified SBICs with expertise in certain sectors or industries. Those SBICs then use their private funds, along with SBA-guaranteed funding, to invest in small businesses.”
One of the major developments revealed at the event was the SBA’s announcement that it has given approval to investment bank Stifel North Atlantic, to begin raising private capital for an Additive Manufacturing (AM) Forward SBIC fund. The AM Forward fund is part of the SBA-DOD SBIC Critical Technologies (SBICCT) Initiative, announced in September 2023 as the first program in a DoD-SBA partnership that was itself launched in December 2022.
The purpose of the SBICCT, jointly administered by the DoD’s Office of Strategic Capital (OSC) and the SBA’s Office of Investment and Innovation (OII), is to “grow private sector investment in component-level technologies and production processes” that are deemed critical to US national security. According to the White House, with the AM Forward fund, “Stifel North Atlantic aims to promote the advancement of numerous [AM] production capabilities including workforce training, part design, machining and inspection, and part qualification, with the objective of increasing advanced manufacturing capabilities in the domestic supply chain.”
The stage was set for this development in August 2023, when it was announced that two members of AM Forward — Lockheed Martin and GE — along with Stifel Financial and nonprofit Applied Science & Technology Research Organization (ASTRO) America, met with Deputy Secretary of Defense Kathleen Hicks and SBA Administrator Isabella Casillas Guzman at the Pentagon. The topic of that meeting was the possibility for a Small Business Investment Fund (SBIF) specifically in support of AM Forward.
Now that the AM Forward fund is a reality, there should presumably be an acceleration of the progress towards meeting of the compact’s objectives, which include a whole host of target ranges involving things like percentage of printed parts sourced from American small businesses. At the same time, it will be even more interesting, perhaps, to see if the parameters of the objectives will adapt to the way the landscape has shifted in the last couple of years.
AM Forward was still only launched less than two years ago, but two years in the 2020s is, of course, an eternity. Supply chains are still as much a mess as they’ve ever been, but the sources of that messiness have fluctuated. Moreover, the government has also issued seemingly countless policy statements in the meantime regarding precisely the sorts of macro supply chain issues that AM Forward was also established to address.
Finally, I will be keeping my eye closely on how this development dovetails with any potential progress to the restoration of the manufacturing R&D tax incentive. The unknowns are piling up and there is a spiraling sense of general uncertainty surrounding the AM industry and the economics of manufacturing at-large. Whatever else is the case, though, it is certainly clear that the US federal government isn’t slowing down its support of AM.