The U.S. Small Business Administration (SBA) recently published a proposed rule that would change small-business size standards by simplifying industry categorization and raising applicable size thresholds. Changes to the standards are mandated by law every five years.
The update would transition from six-digit North American Industry Classification System code standards to four-digit category standards. This would slash the list of similar industry categories by approximately 65 percent, down to 338 broader classifications, and expand the official small-business pool by more than 110,000 companies.
“Thanks to President Trump and America First policies, small businesses are starting and growing at record rates, which is why the SBA is proposing modernized size standards that acknowledge their growth and empower them to compete against large corporations,” SBA Administrator Kelly Loeffler said. “Small businesses create the vast majority of new jobs. This proposal ensures that these job creators have the regulatory certainty to scale, expanding small business eligibility by 0.3 percent, or over 110,000 firms. By streamlining definitions, the SBA will expand access capital, counseling, and contracting opportunities, which in turn create jobs and drive growth.”
Other changes include introducing regional market considerations to ensure size thresholds accurately reflect the realities of local economic competition.
The SBA seeks public comments on the proposed rule.