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8,400 additional businesses to qualify for SBA loans, assistance
Monday - 6/16/2014, 10:15am EDT
The rule, which SBA published in the Federal Register Thursday, adjusts monetary size standards — such as assets, net worth and income — for inflation.
SBA is required to review monetary size standards for inflation at least once every five years. This inflation adjustment is the first since 2008, and the changes go into effect July 14.
Size standards define the largest size a company can be in order to retain status as a small business.
"Since SBA's inception, the fundamental question has been, what should be the numerical definition of small business, industry-by-industry, to establish eligibility for SBA's programs," the agency stated on its website.
The agency most often defines size standards based either on number of employees or average annual receipts. If a business meets the size standards within its industry, it can then qualify for grants, loans and other financial assistance from SBA.
The rule published Thursday adjusts monetary size standards for all industries except the $750,000 receipts-based size standard for agricultural industries.
SBA said it adjusts size standards for two reasons: inflation and changes in industry structure. The administration reviewed industry structure in 2012 and published a series of new rules based on its assessment of market conditions.
The agency said adjusting size standards based on inflation is important to ensuring small businesses can receive the financial help they need.
"Many businesses may have lost small business eligibility for federal assistance under SBA's monetary based size standards simply because of inflation that has occurred since the 2008 adjustment," the rule stated. "This rule aims to reinstate those firms' eligibility for federal assistance."
SBA said the adjustments could lead to 80 additional loans totaling approximately $30 million.
In addition to assistance, the agency said the changes could also amount to an additional $200 million in federal contracts awarded to small businesses.
To date, the interim final rule has received no comments. SBA will accept comments until Aug. 11.