More Businesses to Qualify as 'Small' Thanks to New SBA Size Standards
The U.S. Small Business Administration is increasing the maximum size of a company that may qualify for small-business status in 70 different industries. In about a third of those industries, the average annual revenue size standard was increased from $7 million to $35.5 million. The new standards, which vary by business type, take effect on July 22.
The SBA estimates that the new standards will allow about 17,000 more businesses to qualify for assistance, set-asides, contracts, training, and other government support.
The industries affected by the new size standards include:
- Banks, savings institutions, and credit unions;
- Claims adjusting;
- Farm labor contractors and crew leaders;
- Marine fishing;
- Performing arts companies, promoters, agents, and managers;
- Portfolio management and investment advice;
- Sales financing, consumer lending, and other financing companies; and
- Securities and commodities dealers and brokers.
The changes are the result of a lengthy proposal and public commenting process rather than a rubber stamp, according to the SBA’s press release on the topic. The SBA evaluated each industry’s size standard by looking at average number of employees, startup costs, competition, and other factors. It also considered the share of federal contract dollars that small businesses in each industry currently receive. The SBA seeks to avoid size standard changes that could adversely affect its financial assistance programs or that could allow one business to gain dominance.
The changes are the latest updates in a continuing re-evaluation of appropriate size standards for every industry. At intervals, size changes — mostly increases — for other industries have been announced during the past year or more. The last comprehensive review of the SBA’s small-business size standards took place in the 1970s and 1980s.
It’s Worthwhile to Qualify as a Small Businesses
Companies that rank below the maximum dollar volume, employee count, net worth, or other standard for their industry classification may apply for and benefit from a wide range of SBA and other government programs, international support, and other helpful programs sponsored by banks and private organizations.
- Government loan, bonding, and venture capital programs;
- Government grants made through state and local programs, nonprofit organizations, and other groups for purposes such as creating energy efficient technology and increasing tourism;
- Contracts with the U.S. government, the world’s largest buyer of goods and services;
- One-on-one counseling, training, and management and technical guidance; and
- Assistance from a large number of foreign-based organizations interested in helping U.S. firms succeed in the export business.
To find out whether your company qualifies, visit the SBA’s website to determine your business’s size and then check your small-business status. Need help? Use the SBA’s size standards tool. Or use one of these links to learn more about how the latest changes impact companies in the following industries:
- Agriculture, forestry, fishing, and hunting
- Mining, quarrying, and oil and gas extraction
- Finance, insurance, and management of companies and enterprises
- Arts, entertainment, and recreation
For more information, contact the SBA’s Office of Size Standards at (202) 205-6618 or email@example.com.
Robert Moskowitz is a business writer for Intuit and is passionate about solving small business problems.