SBA wants to streamline size standards

The Small Business Administration has proposed to cut the number of small-business size standards from 37 to 10. All of the size standards will be based on number of employees.

Currently, some size standards are based on annual revenue, and others are based on employee count. Companies that meet the small-business size standard in their industries can qualify for SBA loan programs, contracts set aside for small businesses and other federal business-development programs.

The changes will simplify the size standards and their application to federal programs, according to a proposed rule published March 19 by the SBA in the Federal Register.

For example, many information technology companies sell both goods and services to the federal government, but the small-business size standards for providers of computer equipment and services are not based on the same criteria. The size standard for equipment providers is based on employee count, while for services providers it's based on annual revenue.

As a result, a company may be considered small for one type of sale but not for a related sale. The proposed rule will eliminate this confusion, according to the SBA.

Under the proposal, size standards will range between 50 employees and 1,500 employees, depending on the industry or SBA program.

Comments on the proposed rule are due by May 18 to restructure.sizestandards@sba.gov or at www.regulations.gov.