The federal Small Business Administration (SBA) provides essential financial support in the way of loans to small businesses throughout Kansas, Missouri and Oklahoma. Small businesses of all types rely on these loans for business expansion or even for daily operating expenses. An important part of financial planning done by small businesses is keeping abreast of the latest changes in SBA rules and procedures.
SBA Size Criteria
As helpful as SBA loans are, especially in these tough economic times, small businesses must qualify for these loans by meeting eligibility guidelines. Size characteristics in terms of revenue or number of employees are key components of these eligibility criteria. The SBA defines size criteria as maximum values for eligibility; that is, in order to qualify for SBA programs a business must be below the specified size criteria.
The SBA defines individual size criteria for different types of businesses based upon their 4-digit North American Industry Classification System (NAICS) codes.
The Role of Inflation
Any businessperson recognizes the impact of inflation on the profitability and gross revenue of a business. Inflation automatically affects any SBA size criteria based upon dollars of income, potentially making certain businesses ineligible for SBA programs. The SBA acknowledged the role of inflation by adjusting the dollar limits upward in 2008. This action restored the dollar limits to be on an inflation-adjusted par with prior values.
On September 10, 2010, the SBA published a new round of size criteria specifically for the retail trade (NAICS Sector 44-45, Retail Trade). The SBA is conducting a general readjustment of all size criteria, both dollar limits and number of employees, based upon current industry analyses. The goal of the SBA is to complete all size adjustments by industry code within the next two years and allow more small businesses to qualify for SBA support.
With the new limits “retail trade” small businesses that did not qualify for SBA programs may now be eligible. Businesses with other industry codes should watch for future size limit changes which may affect their eligibility.
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