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Good Measure

The SBA is looking for new ways to size up small businesses.

This story appears in the June 2004 issue of Entrepreneur. Subscribe »

Size matters. So says the in its proposed rule to bring small- size standards into the 21st century. The standards say whether an entrepreneur qualifies for SBA programs and are most important with respect to eligibility for 7(a) loans and small-business set-aside contracts offered by other federal agencies.

Now the agency has 30 size standards based on annual receipts, five on number of employees and two on other measures. The agency wants to eliminate almost all the annual receipts categories and establish 10 employee size categories, an increase from the current five. Thirty-one industries, including construction and engineering, would also have to meet size standards based on average receipts. Says SBA administrator Hector V. Barreto, "Small-business owners have told us that the current system is difficult for [them] to understand."

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