This month, SBA issued a final rule updating its size standards for multiple NAICS codes in the manufacturing industries and industries with employee-based size standards in other sectors (except wholesale trade and retail trade). As the final rule explains in great detail, SBA increased some of the NAICS code’s size standards and retained others. Additionally, SBA decided to retain an employee based size standard for the nonmanufacturer rule. Let’s take a closer look.
Continue readingTag Archives: employee-based size standards
Upcoming SBA Rule Will Switch to 24-Month Calculation for Employee Size Standards
SBA has issued a final rule changing all employee size standards to a 24-month calculation. This rule is scheduled to be published in the Federal Register on June 6, 2022, and and will take effect 30 days from the date it is officially published. Let’s take a closer look.
Continue readingSetting the Standard: How the SBA Determines Size Standards for Small Businesses
In a recent post, we examined some proposed new size standards for manufacturing and other industries that utilize employee-based size standards. This probably got many of you wondering: How does the SBA determine what the size standards should be? It’s a good question, and today, we’re going to look at just that. Hopefully, this will provide some insight as to the SBA’s approach to setting size standards.
Continue readingSBA’s Plans For New Rules in 2021 and Beyond
SBA has issued its regulatory agenda for what rules it plans to roll out later this year. Here is a rundown of the key rules.
Continue readingCongress Lengthens Employee-Based Size Standard Period
If you’re a regular SmallGovCon reader (and we hope you are!), you probably are familiar with the Small Business Runway Extension Act. Under the Runway Extension Act, Congress lengthened the period used to determine small business status under receipts-based size standards, from three to five years. Congress’s laudable goal was to allow businesses to “stay small” longer, but the Runway Extension Act can backfire when a business has been shrinking instead of growing.
Now, Congress has done it again. In the Conference Report to the 2021 NDAA, Congress has extended the period used to measure employee-based size standards, from 12 to 24 months–and whether this is good news may depend on if a business has been growing or shrinking.
Continue readingSBA: It’s (Maybe) Fine if You Didn’t Count the Employees of Your Foreign Affiliates for PPP Purposes
In what might be a classic “now you tell me” scenario, the SBA issued a new rule May 21 saying that if an applicant failed to count the employees of its foreign affiliates when it was determining its eligibility, the SBA will not hold that against the applicant so long as the application was submitted before the SBA clarified that requirement.
The problem with that, however, is that because the safe harbor ended May 18, it’s highly likely that a lot of those businesses already gave their PPP loan back. They’d be forgiven for thinking they had to, as earlier this month Sen. Marco Rubio was indicating that Congress would investigate companies who took PPP funds for which they weren’t eligible.
Continue readingSBA Rejects Major Changes in Size Standard Methodology
The SBA has rejected several recommendations for major changes in how the SBA calculates small business size status.
In commentary published in the Federal Register last week, the SBA rejected (among other things) recommendations that it use average employee count to evaluate the sizes of construction firms and that other firms’ sizes be measured by profits or net worth instead of average annual receipts.