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SBA proposes small business size standard revisions to increase eligibility for loan programs

Public Comments Due by July 26, 2021

WASHINGTON – The U.S. Small Business Administration is seeking public comments on a proposed rule that would revise the small business size standards for businesses in two North American Industrial Classification System (NAICS) sectors to increase small business eligibility for SBA’s loan programs. 

The NAICS sectors reviewed in the proposed rule are Wholesale Trade (Sector 42) and Retail Trade (Sector 44-45).  SBA proposes to increase size standards for 49 industries in those sectors. The following table includes the number of industries reviewed and the number of industries with proposed increases in size standards by the NAICS sector.

NAICS Sector Sector Name No. of Industries
Reviewed with Proposed Increases in Size Standards
42Wholesale Trade  7114
44-45Retail Trade  6635
Total13749

SBA estimates that about 1,800 additional firms in these two sectors would become eligible for SBA’s loan and other federal non-procurement programs under the proposed size standards, if adopted. NAICS codes under Sectors 42 and 44-45 do not apply to federal procurement and hence size standard revisions in this proposed rule will have no impact on contracting. Wholesalers and retailers can qualify for contracting as small businesses under the 500-employee nonmanufacturer size standard, which is not revised in this proposed rule.

The proposed rule is part of the second five-year comprehensive review of small business size standards, as required under the Small Business Jobs Act of 2010.  The proposed revisions reflect changes in industry conditions and SBA’s policy position under the current economic situation due to the COVID-19 pandemic.  In response to the pandemic, SBA is retaining current size standards where data suggests that size standards should be lowered.

As part of the ongoing review of all size standards, the SBA generally considers the structural characteristics of individual industries, including average firm size, the degree of competition, and federal government contracting trends. This ensures that small business size standards reflect current economic conditions in those industries.  The proposed increases to the size standards in those two sectors will enable some mid-sized businesses to regain their small business status and current small businesses to retain their small business status for a longer period, thereby allowing them to benefit from SBA’s loan and other non-procurement programs.  

Comments can be submitted on this proposed rule on or before July 26, 2021, at www.regulations.gov, using: RIN 3245-AH10. You may also send comments by mail to Khem R. Sharma, Chief, Size Standards Division, 409 3rd Street SW, Mail Code 6530, Washington, D.C., 20416.

An SBA-issued White Paper entitled, “SBA’s Size Standards Methodology,” which explains how SBA establishes, reviews, and modifies its receipts-based and employee-based small business size standards, can be viewed at http://www.sba.gov/size

For more information about SBA’s revisions to its small business size standards, visit “announcements about updating size standards” at http://www.sba.gov/size.

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