SBA changes size rules to expand small-business category

The U.S. Small Business Administration announced Tuesday it has proposed size standard increases for small businesses in 29 industries. The proposed rules, published in the Federal Register for comment, would adjust the size definition of small businesses in fields such as real estate and property management, as well as colleges,…

The U.S. Small Business Administration announced Tuesday it has proposed size standard increases for small businesses in 29 industries. The proposed rules, published in the Federal Register for comment, would adjust the size definition of small businesses in fields such as real estate and property management, as well as colleges, junior colleges and universities.

The adjustments, based on annual gross revenues, reflect changes in marketplace conditions in those sectors. The standards delineate how large a business can be and still qualify as small for federal government programs. For example, the current size standard for a home health equipment and rental company is $7 million in gross revenue; under the proposed standards, the gross revenue could increase to $30 million.

“A lot of companies have lost their small business preference because they exceeded the size standard,” said Richard Zilg, assistant district director of the SBA’s New Jersey office. “Now, they can go back and enter the arena. It helps more firms become eligible or re-eligible for loans from the SBA and also to get contracts with the federal government.”

The proposed changes take into account the structural characteristics within individual industries, including the average firm size, degree of competition and federal government contracting trends. This ensures size definitions reflect current economic conditions within those industries.

Comments on the proposed changes may be submitted by Jan. 17 at www.regulations.gov. Zilg said the SBA will analyze the comments and likely release the finalized standards in the spring.