SBA proposes new size rules

Proposed rule to restructure small business size standards

The Small Business Administration has published a proposed rule that would set new size standards for many small businesses.

Whether a business is small, and therefore eligible for a variety of benefits that apply to small firms, depends on the type of company. SBA is trying to reduce the number of different size categories for businesses and base most determinations of whether or not a business is small on its number of employees.

Currently, some businesses count employees while others determine their size status based on their revenues, depending on which industries they are in. SBA has 37 different size standards covering 1,151 industry classifications.

Under the proposed new rule, most businesses would be measured by number of employees. There would be 10 different size standard levels, so whether an industry is small would still depend on what industry it is in, along with how many people it employs. The proposed size standards range from 50 employees to 1,500.

According to SBA's proposed rule, companies that already use the number of employees to determine their size status will see no change. For companies that use their receipts, SBA has tried to choose head count levels that are consistent with the revenue amounts, in hopes that few companies will gain or lose small-business status due to the change in measures.

A few types of companies will be measured by both employee number and revenue.

Some of the size classifications listed in the proposed new rule are:

* Computer storage device manufacturing: 1,000 employees.

* Internet publishing and broadcasting: 500 employees.

* Internet service providers: 150 employees.

* Data processing, hosting and related services: 150 employees and $30 million annual revenue.

* Custom computer programming: 150 employees and $30 million annual revenue.

Comments on the proposed rule are due May 18. Comments may be e-mailed to restructure.sizestandards@sba.gov.

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