As published in Toledo Business Journal - October 1, 2019

Tweet

SBA adjusts size standards to expand lending and contracting opportunities

The US Small Business Administration (SBA) recently issued an interim final rule that will adjust monetary-based small business size standards for inflation to allow more small businesses to become eligible for the SBA’s loan and contracting programs. The interim final rule was published in the Federal Register on July 18, 2019.

According to officials, the SBA is adjusting its industry-specific monetary-based size standards by nearly 8.4% to reflect the inflation that has occurred since the last adjustment for inflation in 2014. This time, the SBA is also adjusting the revenues-based size standards for agricultural industries, which were previously set by statute. These adjusted size standards became effective in mid-August and will be reviewed again as part of the second five-year review of size standards mandated by the Small Business Jobs Act of 2010.

Additionally, the SBA is adjusting program-specific monetary-based size standards by the same amount for sales or leases of government property and stockpile purchases, noted officials. The SBA is not adjusting the tangible net worth and net income based interim alternative size standards that apply to the SBA-guaranteed 7(a) and 504 Certified Development Company loan programs, which were established under the Small Business Jobs Act.

The interim alternative size standards for the 7(a) and 504 loan programs will remain in effect until the SBA establishes a permanent alternative size standard for these programs. The SBA is also not adjusting the tangible net worth and net income based alternative size standard for the Small Business Investment Company program.

The SBA estimates that nearly 90,000 additional businesses will gain small business status under the adjusted size standards, becoming eligible for SBA loan and contracting programs. This could possibly lead to as much as $750 million in additional federal contracts awarded to small businesses and up to 120 additional small business loans totaling nearly $65 million, noted officials.

The SBA also started a partnership with the Veteran Entrepreneurial Training and Resource Network (VETRN) to establish a pilot training program for military veterans who are small business owners and their immediate family members.

The Veteran Owned Small Business Growth Training program will equip these entrepreneurs with the resources and networks necessary to grow their small businesses. An award of $100,000 from President Donald Trump’s salary from the second quarter of fiscal year 2018 will fund the program, noted officials.

The 26-week program based in Portsmouth, New Hampshire, which began in September, will feature 13 weeks of Saturday morning classroom sessions with 12 to 20 participants, as well as 13 weeks of peer-to-peer mentoring sessions. The course curriculum will include strategic planning, financial management, cash flow forecasting, marketing the small business, sales methods, human resources, developing a growth plan, access to capital, legal issues, and government contracting.

“While programs exist that help veterans start their small business, there is a critical need for programs that assist existing business owners with growing their business,” said SBA acting administrator Chris Pilkerton. “Adding VETRN to the SBA resource network will enable us to fill this gap and empower veterans with the training, mentorship, tools, and network they need to achieve their long-term goals.”

Applicants must be a current business owner with at least one year of operation and one employee (not including the owner), and annual revenues of $75,000 or more. Also required is the passion, dedication, and commitment to grow the small business, noted officials.