The Small Business Administration (SBA) Revises Small Business Size Guidelines in 16 Areas
in Business by Mitch Alborn
The Small Business Administration of the United States announced four final regulations to change revenue-based small business size criteria in 16 North American Industrial Classification System (NAICS) sectors. This will allow an extra 59,000 small businesses to participate in the SBA's government contracting and lending programs. The final guidelines are part of the Small Business Jobs Act of 2010's second five-year review of size criteria.
During the proposed rule stage of the four regulations, the SBA received over 1,100 public comments as part of the review process. As a result, the SBA will raise 229 size criteria in 16 industries.
"The SBA continues to adjust its approach to size criteria in order to guarantee that as many small companies as possible have access to contracting and loan opportunities," said Bibi Hidalgo, Associate Administrator for Government Contracting and Business Development. "With the release of these final regulations, 59,000 more enterprises will be eligible for millions of dollars in revenue and business growth prospects across a wide range of industries." This development is also crucial for contracting agencies, since a varied industrial base ensures a strong supply chain and, as a result, promotes our nation's overall economic health."
In addition to increasing access to SBA programs for approximately 59,000 additional firms, the SBA estimates that the four final rules will create contracting opportunities worth $1 billion for 844 newly qualified small businesses and extend 96 7(a) and 504 loans worth nearly $45.0 million to newly qualified small businesses.
The size criteria adjustments established in these final regulations reflect the SBA's considerations of pertinent statistics, public comments, and the effects of the ongoing COVID-19 epidemic on small businesses and the general economy, as well as the government response. In response to the pandemic, the SBA will maintain current size limits unless data indicates that size standards should be reduced. Increases in size criteria in 16 industries will allow certain mid-sized enterprises to reclaim small company status and current small businesses to keep small business status for a longer period of time, allowing them to benefit from the SBA's procurement and lending programs.
As part of the ongoing assessment of size requirements, the SBA intends to release additional rulemakings on size standards in Sector 42 (Wholesale Trade), Sector 44-45 (Retail Trade), and Sector 31-33 in the coming months (Manufacturing).
