It isn't just about that. You need industrial policy. And not just stuff like the CHIPS act.

In China a small outfit can get financing and open a factory anywhere.

You can't do that in the USA. You are too small for the lenders or investors who do such things to care yet too risky for traditional financial institutions to risk anything on you.

If I want to buy a couple of CNC machines and start making a product in my garage I have to hope I have enough room on credit cards to do it because I cannot get the money from anyone. Doesn't matter if I have a good idea. Doesn't even matter if I have some initial customers/orders.

If the government is going to piss away money then at least piss it away on that sort of economic activity. If you can present a coherent business plan or product design then lend people the capital secured by the equipment and/or IP with generous repayment terms. Set progressive milestones to unlock additional financing... for example give a gov backed credit account at SendCutSend. When you have an engineer's report on the prototype to turn in you unlock financing to order your first CNC machines. Develop a pipeline. A script to follow. Something a person can follow to get big enough to become a real business.

Grant time to pivot if necessary. If that doesn't work then ultimately the government takes possession of the equipment. Make it clear so long as you return everything in good working order then in X years you're eligible to re-enter the program. Then hand that equipment over to the next person in line.