Every five years the SBA is supposed to review some of its size standards. In August 2025, the SBA issued a proposed rule which would increase the size standard for over two hundred and sixty industries. As the proposed rule explains in great detail, SBA increased size standards for some NAICS codes and retained others. Let’s take a closer look.
On August 22, 2025, the SBA published a proposed rule, which would increase the size standard for many of the receipts based size standards. This is important, as this would set the standard for whether your business is a “small business” under SBA regulations or not. (See our blog on how to calculate small business size here). Under this proposed rule, the SBA proposed to update the size standard of many industries’ NAICS codes (over two hundred and fifty), while making no changes to about two hundred and thirty size standards. Clearly, SBA was quite busy, looking at about five hundred different industries and their size standards. We of course recommend diving into the proposed rule to see if your specific NAICS code size standard(s) were proposed to be updated, but for a quick overview, the SBA did provide the following summary:
As you can see, the largest amount of changes were industries with NAICS codes starting with “44” or “45” (Retail Trade); “54” (Professional, Scientific and Technical Services); “56” (Administrative and Support and Waste Management and Remediation Services); and “62” (Health Care and Social Assistance). Notably, one of the industries with the least amount of change are NAICS staring with “23” (Construction). To give you an idea of how far the SBA went with their proposed increases, here are some proposed updates from just some of those industries.
For Professional, Scientific and Technical Services, some of the proposed changed NAICS size standards include:
- 541310 (Architectural Services) increasing from $12.5 Million to $16.0 Million.
- 541330 (Engineering Services) increasing from $25.5 Million to $29.0 Million.
- 541380 (Testing Laboratories and Services) increasing from $19.0 Million to $23.5 Million.
- 541611 (Administrative Management and General Management Consulting Services) increasing from $24.5 Million to $27.0 Million.
For Construction, the two proposed changed NAICS size standards are:
- 238120 (Structural Steel and Precast Concrete Contractors) increasing from $19.0 Million to $19.5 Million.
- 238290 (Other Building Equipment Contractors) increasing from $22.0 Million to $27.5 Million.
That means general construction size standards are not going up this time.
For Administrative and Support and Waste Management and Remediation Services some of the proposed changed NAICS size standards include:
- 561110 (Office Administrative Services) increasing from $12.5 Million to $15.5 Million.
- 561510 (Travel Agencies) increasing from $25.0 Million to $33.5 Million.
- 561612 (Security Guards and Patrol Services) increasing from $29.0 Million to $34.0 Million.
- 561730 (Landscaping Services) increasing from $9.5 Million to $13.0 Million.
In this proposed rule, the SBA repeatedly calls back to its size standard methodology, revised in 2024, which had comments published on the Federal Register back in 2024. While that is itself quite complicated, an important line from that commentary to keep in mind is:
SBA retains its policy of capping the calculated receipts-based size standards at $47 million and calculated employee-based size standards at 1,500 employees. SBA has maintained its employee-based maximum size standard cap at the 1,500 employees despite the increased automation and resultant labor productivity growth. However, the receipts-based size standards have gradually increased over time due to inflationary adjustments, and the highest receipts-based size standard stands at $47 million today.
So, SBA will not adjust size standards to being above $47 Million currently.
It is also important to remember that these updates to size standards is not a final rule, but rather a proposed rule. So there is a comment period open if you believe there are concerns or issues you would like to raise. Comments may be submitted until October 21, 2025.
This proposed rule, if finalized, would lead to possibly many contractors who are on the borderline of being other than small, being suddenly small again under certain NAICS code. So it is quite important to review this to see if you may have more wiggle room on size possibly in the future, or if your industry did not receive an update in size. Additionally, the proposed rule discusses at length the application of SBA’s 2024 revisions to its size methodology to these new size standards, which is deserving of its own later blog post, that many contractors may find interesting. Of course, if you find yourself with questions about your business size under SBA regulations, or questions on federal contracting matters, make sure to reach out to federal contracting lawyers such as ourselves, to assess your questions.
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