canoes on riverThe U.S. Small Business Association (SBA) recently issued updated monetary based small business size standards. Monetary based size standards include factors such as receipts, assets, net worth, and income. The new standards will allow more businesses to become eligible for SBA small business procurement assistance programs.

All industry specific monetary based size standards are being adjusted based on the change in inflation that has occurred since the last adjustment to standards in 2008. The SBA is required to evaluate the impact of inflation on monetary based size standards at least once every 5 years. Tweet This With significant inflation, businesses can lose small business status if the standards aren’t adjusted to reflect inflation. The recent changes are in addition to the standards enacted by the Small Business Jobs Act of 2010, which expanded eligibility standards based on industry structure and Federal market conditions.

The SBA is also adjusting program specific monetary based size standards, with the exception of standards for 7(a) and 504 loan programs. These programs have specific standards already outlined in the Small Business Jobs Act that will remain in effect until the SBA finalizes permanent size standards.

The changes in monetary based size standards could greatly expand the reach of government assistance programs to small businesses. According to an SBA estimate, 8,500 businesses could gain small business status under the new changes. The new standards could also lead to the addition of $150 million to $200 million and upwards in additional federal contracts for small businesses, as well as $80 million in additional small business loans. The changes will go into effect July 14, 2014.

 

Photo Credit: edwademd, Flickr.