SBA Rule Change Expands Contracting, Loan Eligibility

07.24.2019
Small Business

The U.S. Small Business Administration is adjusting its rules to allow more small businesses to qualify for SBA loan and contracting programs.

The SBA recently issued an interim final rule that adjusts monetary-based small business size standards for inflation.

The agency estimates the change, the first in five years, will allow nearly 90,000 businesses to gain small business status under the adjusted size standards and become eligible for SBA loan and contracting programs.

This could lead to as much as $750 million in additional federal contracts awarded to small businesses and up to 120 additional small business loans totaling nearly $65 million, the administration said.

The interim final rule was published in the Federal Register July 18.

The SBA is adjusting its industry-specific monetary-based size standards by nearly 8.4% to reflect the inflation that has occurred since the last adjustment for inflation in 2014.

Agricultural Industries

This time, the SBA is also adjusting the revenues-based size standards for agricultural industries, which were previously set by statute.

These adjusted size standards will become effective Aug. 19 and will be reviewed again as part of the second five-year review of size standards mandated by the Small Business Jobs Act of 2010.

Additionally, the SBA is adjusting program-specific monetary-based size standards by the same amount for sales or leases of government property and stockpile purchases.

The agency estimates the change allows nearly 90,000 businesses to gain small business status under the adjusted size standards.

The SBA is not adjusting the tangible net worth and net income based interim alternative size standards that apply to the SBA-guaranteed 7(a) and 504 Certified Development Company loan programs, which were established under the Small Business Jobs Act.

The interim alternative size standards for the 7(a) and 504 loan programs will remain in effect until the SBA establishes a permanent alternative size standard for these programs.

Public Comment

The SBA is also not adjusting the tangible net worth and net income based alternative size standard for the Small Business Investment Company program.

Comments may be submitted on this interim final rule by Sept. 16, 2019, identified with this RIN number: RIN 3245-AH17.

Interested parties may also mail comments to Khem R. Sharma, Chief, Office of Size Standards, 409 Third St. SW, Mail Code 6530, Washington, DC 20416.

For detailed information on how SBA establishes, reviews, or modifies its size standards, please view the SBA-issued Size Standards Methodology white paper.

It provides the latest information about the SBA’s revisions to its small business size standards.

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