SBA Redefines Small Business Size Standards to Include More Businesses

Written on October 6, 2010 – 10:21 am | by Ashley Johnson

It’s a question that comes up time and time again: What defines a small business? Is it based on the number of employees or yearly sales? Setting size standards determines eligibility for small businesses loans, which is particularly important now as provisions of the Small Business Jobs Act are enacted.

The Small Business Administration is taking steps over the next two years to redefine small business size standards, which haven’t been revamped since the 1980s. On Oct. 6, new rules take effect that will make an additional 17,000 businesses in the retail, hospitality, and other service industries eligible for SBA loans and other programs, says Reuters.

Car dealers will also benefit from changes in size standards. The standards for dealers will be shifted from a maximum sales-based measurement (previously $29 million in average yearly sales) to an employee-based number of 200 workers, said Reuters. The Washington Business Journal estimates this change will make 5,700 more dealerships across the county eligible for SBA loans and programs.

The SBA changes will also allow more hotels, restaurants, cafeterias and food service contractors to qualify for SBA programs – an increase of about 2,000 businesses total, says Reuters.

Perfect Business!