Small Business Administration Redefines ‘Small Business’
Small businesses are getting a little bigger, thanks to the new size standards of the Small Business Administration. Effective November 5, 2010, the change that almost 18,000 more companies in 70 industries, including retail and hospitality, eligible for SBA programs, including loans and help win federal contracts.
size standards for SBA vary by industry, and caps are typically established based on the number of employees or average annual income – the criteria that have been in force since 1984. This new “comprehensive review” of the rules of size at least twice the cover of an annual average income, leading to $ 7 million to as much as $ 35.5 million.
The change is said to benefit car dealers, especially as they represent almost one third of the 18,000 new considered “small businesses.” Whereas the top for used car dealers is based on income, the new rule hinges on the number of employees: 200 is the limit. About 90 percent of all car dealerships will now be considered small businesses, some with incomes up to $ 120 million, according to a report in The New York Times’ You’re the Boss blog.
“These increases in average size standards over small U.S. companies will be eligible and can access resources and services of the SBA and other federal agencies have available,” said SBA Administrator Karen Mills said in a statement . The new size guidelines are aligned with current economic indicators and industry and are designed to ensure that small businesses have the tools they need to grow and create jobs because small businesses have created 65 percent of all new jobs in the last 17 years and employ half the workforce of the U.S. private sector.