SBA increases size standards for inflation

The SBA has adjusted its dollar-based small-business size standards, which are based on receipts, net worth and financial assets, to reflect inflation since February 2002. That’s the last time SBA adjusted size standards because of inflation, and since then, prices have increased 8.7 percent, according to an SBA news release.

SBA also increased the familiar anchor size standard from $6 million to $6.5 million, and size standards higher than $6 million also reflect similar percentage increases.

“These changes to our size standards and eligibility criteria will ensure that growing small businesses whose growth has matched the inflation rate will continue to have access to SBA’s financial aid and contracting assistance programs,” said SBA Administrator Hector V. Barreto in the release. “We decided to make these changes immediately, ... because of the pressing needs that so many small businesses have in the Gulf Coast and in Florida from the recent destructive hurricanes.”

SBA also changed how it determines the size of small-business concerns when companies apply for SBA business loans and economic injury disaster loans. Instead of looking at only the applicant’s primary industry, SBA now looks at both an applicant’s primary industry and the primary industry of the applicant’s affiliates. This change provides additional assistance to small businesses that have subsidiaries and affiliates.

Procedures for determining size status for economic injury disaster loans also have changed for businesses located in disaster areas due to hurricanes Katrina, Rita and Wilma. Instead of having to show that a company was a small business when the hurricanes struck, affected companies in those areas only have to fit the new small-business size standard when SBA accepts the application for processing.

The new size guidelines take effect Jan. 5.

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