Size of firms that is an indicator of a small business remained an issue of debate for quite some time now. But recently, the SBA has issued new rules as part of the Federal register. The new rules increase size standards of firms so that even if they are substantially bigger they can still be considered small organizations.
SBA made changes in the North American Industry Classification System (NAICS) in sectors like:
- Real Estate, Rental and Leasing.
- Educational Services; and
- Health Care and Social Assistance
The standards have been revised to redefine the maximum size up-to which an enterprise can be considered a small business. It will give federal agencies a larger pool to choose from and so they can forward SBA business loans to eligible organizations .
Size standard of businesses has been increased in real estate, rental and leasing sector. Under the new norms,13,000 additional firms will qualify as small under the new size standards. Then the organizations can become eligible for SBA loans and federal procurement programs. The educational services sector too could see an additional 1,500 businesses qualifying as small under the new size standard. In Health Care and Social Assistance Sector too, 4,100 additional firms can qualify as small and find loan grants.
SBA has started to review all size standards considering the structural characteristics of all industries, that include, government contracting trends, degree of competition and average firm size.
This article was submitted by Raj Tulshan, Director of Business Development of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to firstname.lastname@example.org