SBA Makes Some Businesses Small Again

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The Small Business Administration raised the size standards that define what it considers a small business last week. The move makes about 11,600 more companies eligible for SBA programs, the federal agency estimated.

The SBA increased the standards by as much as $2.5 million, with different increases for different industries. For an industry where the SBA previously defined a small business as a firm with $6 million or less in annual sales receipts, the new size standard is $6.5 million in annual receipts.

The SBA said that it raised standards because of inflation, as prices grew by 8.7% since the standards were last raised three years ago. The SBA is required to update them every five years.

Last year, the SBA took heat from small businesses when it proposed an overhaul of its standards. But firms that would have lost their small business designations protested the move, and the SBA pulled it back.

The new change won't erase the eligibility of any business for the SBA's programs. But with a few more companies now eligible for SBA programs, might the change make it tougher to score an SBA loan?