SBA launches review of size standards

//October 29, 2009

SBA launches review of size standards

//October 29, 2009

Public comment sought on proposed changes that would affect 71 types of businesses.The U.S. Small Business Administration on Tuesday opened to public comment its proposed increases in the size definitions in three commercial sectors that cover 71 different types of businesses.

The public comment window is part of a comprehensive review the SBA has launched of all its small-business size standards. Two-thirds of the businesses covered by the proposed changes are in retail trade; the others are in “accommodations and food services, and other services,” the SBA said in a press note. It conducted the last such review 25 years ago, it added.

President Barack Obama already has indicated his support of the move at an Oct. 19 meeting in Landon, Md. “We must do more to give these smaller banks new opportunities to access capital, so that they can lend to small businesses in their communities,” he said at the event, according to an SBA release.

If adopted, the changes will expand eligibility to small businesses and help them gain access to SBA’s financial assistance, contracting and other programs, an SBA statement said.

The proposed changes are:

• Increasing the size of SBA’s 7(a) loan from $2 million to $5 million.

• Increasing the size of SBA’s 504 loan from $2 million to $5 million for standard borrowers (supporting a total project of $12.5 million), and from $4 million to $5.5 million for manufacturers (supporting a total project of $13.75 million).

• Increasing the size of SBA’s Microloan from $35,000 to $50,000.

Bankers active in providing SBA-approved loans have supported the plan.

“It is another way the SBA and the new administration is trying to make more capital available to small businesses,” said Andrew Glatz, senior vice president and SBA department manager at Central Jersey Bank NA, in Oakhurst. “A modification of the size standards will enable more small businesses to have access to the various SBA programs.”

Small-business owners in New Jersey received 30 percent more loans and 14 percent more dollars from April 2009 through September 2009, according to James Kocsi, SBA’s New Jersey district director. During that period, his office approved 630 loans for $180.1 million, compared to 486 loans for $158 million between October 2008 and March 2009, the SBA stated.

The SBA will accept comments on the proposed rule changes until Dec. 21 on its Web site, www.regulations.gov, or through e-mail at [email protected]

E-mail Shankar P. at [email protected]