SBA’s small business programs range from guaranteed loans to disaster assistance and procurement programs. But how can you know if your business qualifies for SBA assistance? After all, what makes a small business “small” and a large business “large?”
The short answer lies in size standards. Size standards are definitions SBA has established to ensure that a business is eligible to participate in an SBA program. These standards are matched to the North American Classification System,* which assigns a numeric code to every different business sector or industry in the economy. SBA assigns a size standard to each sector/code, specifying the maximum size a company can be to qualify for both SBA and government wide benefits. So generally speaking, if your business is smaller than the size standard for your particular industry program, you qualify.
How Are Size Standards Measured?
Generally, size standards are measured using three factors:
- How many employees your business has
- Your average annual receipts
- Your industry type
Knowing whether you’re “small” in the government’s eyes usually comes down to your business size measured against your industry; but there are a few rules of thumb regardless of industry.
Here’s a general size guide for businesses depending on industry type. Please note: all dollar figures below refer to average annual gross receipts.
1.) Construction: For general building and heavy construction contractors, the size standard is $33.5 million. For special trade construction companies, it can be far less ($14 million); and for dredging companies, it’s $20 million. For land subdivision, the standard is $7 million.
2.) Manufacturing: Most manufacturers are considered small if they have fewer than 500 employees. However, for some, the standard is much higher (1,500 employees).
3.) Mining: The standard is 500 employees for all mining industries (except mining services).
4.) Retail Trade: For most companies, the maximum size is $7 million; for grocery stores, department stores and car dealers, the standard is higher. However, for some federal procurement “set asides,” the standard is 500 employees or less.
5.) Services Industry: The most common standard in services is $7 million. It’s much higher ($25 million) for companies in computer programming, data processing and systems design and some other sectors. ]
6.) Wholesale Trade Industry: For SBA loan programs (like 7(a) and 504), the standard is 100 employees or less. But for federal procurements where contracts are “set aside” for specific classes of businesses, the standard is 500 employees or less.
- NAICS code information on SBA.gov
- SBA’s Table of Small Business Side Standards
- SBA’s Guide to Size Standards
- Size Standards Blog on the SBA Community
- What’s New With Size Standards on SBA.gov
*Directs to non-government website