SBA Adjusts Revenue-Based Size Standards

Adjustments account for inflation, widen eligibility for agency programs

The SBA hasincreased its revenue-based size standards for small businesses by15.8 percent to account for inflation since 1994, SBA AdministratorHector V. Barreto announced January 31. Since the size standardsare used to determine whether a business is a small business forthe purposes of eligibility for SBA programs, the inflationadjustments will make it possible for at least 8,600 companies toregain their eligibility as small businesses.

The new standards were published in the Federal Register onJanuary 23, 2002, as an interim final rule with a 30-day commentperiod. They will become effective on February 22, 2002. For smallbusinesses located in the September 11 presidentially declareddisaster areas of metropolitan New York City and Northern Virginia,the new regulations will apply retroactively to September 11,2001.

As a result, the SBA's Office of Disaster Assistance will goback and review applications for disaster recovery loans in thoseareas to determine whether those that were rejected because theydidn't qualify as small businesses have become eligible forassistance. "This adjustment of SBA's size standards willrestore small-business status to many firms that became ineligiblefor SBA assistance strictly because of inflation," says SBAAdministrator Hector V. Barreto. "I find it especiallyimportant that we are able to apply retroactively these updatedsize standards to firms applying for Economic Injury Disaster Loansdue to the September 11 attacks."

The SBA adjusts the revenue-based size standards using thechain-type price index used by the Department of Commerce tomeasure inflation in the economy. Revenue-based size standards forsmall businesses had not been updated for inflation since 1994.Industry sectors whose size standards had been changed for othercriteria that also included inflation since 1994 will be adjustedaccordingly to match the new percentage.

For additional information on the new size standards, visit theSBA's Office of Size Standards Web site and click on"What's New?"

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