Will the Change in SBA Size Standards Affect Your Small Business?

By Karen Axelton

Is your business involved in federal contracting or subcontracting? Are you trying to get an SBA loan or obtain a grant? If so, you’ll want to know about new changes to the SBA’s small business size standards.

Size standards are set by the SBA to classify for-profit businesses as described by the North American Industry Classification System (NAICS) Identifying Industry Codes. One reason for size standards is to ensure that big businesses don’t unfairly compete for contracts, funding or other assistance from the federal government. Size standards help ensure that only businesses deemed small enough—whether based on receipts or number of employees—are eligible for these types of benefits.

The most recent change to the size standards has increased 37 small business size standards for 34 industries and three sub-industries (“exceptions” in SBA’s table of small business size standards) in North American Industry Classification System (NAICS) Sector 54, “Professional, Technical, and Scientific Services.” The SBA also increased the one size standard in NAICS Sector 81, “Other Services,” which it did not review in 2010. These size standards are all receipts based. SBA is retaining the current standards for the remaining industries in NAICS Sector 54.

As part of an ongoing review of all size standards, the SBA evaluated all of the revenue-based size standards in these sectors to determine whether to revise the existing size standards.  The SBA took into account characteristics in each industry, including average firm size, the degree of competition and federal government contracting trends, to ensure that size definitions reflect the current economic conditions within those industries. After reviewing public comments, the SBA determined that changing the size standards would allow more small businesses to retain their small business status, while giving government agencies more small businesses to choose from when awarding contracting opportunities.

The review of size standards is part of the Small Business Jobs Act of 2010, and under this law, the SBA’s comprehensive review of all size standards will continue for the next several years. According to the SBA, as many as 8,350 additional companies will become eligible for SBA programs as a result of these revisions.

You can find a table of SBA size standards, as well as other information about size standards, at the SBA website.

Image by Flickr user Randen Pederson (Creative Commons)

This entry was posted on Thursday, March 1st, 2012 at 6:00 am and is filed under sales process, Small Business, small business. You can follow any responses to this entry through the RSS 2.0 feed.


You can leave a response, or trackback from your own site.