SBA Revises Size Standards for Wholesale and Retail Trade Industries

The U.S. Small Business Administration (SBA) increased small business size standards affecting businesses in 46 industries in North American Industry Classification System (NAICS) Sector 42, Wholesale Trade, and in one industry in Sector 44-45, Retail Trade.  SBA retained the current size standards for the remaining industries in those sectors.  The final rule was published in the Federal Register on January 25th and will be effective February 26, 2016.

As part of the review of all size standards under the Small Business Jobs Act of 2010 (Jobs Act), SBA reviewed 73 employee based size standards in those sectors to determine whether they should be revised or retained. 

The revised size standards would define the maximum number of employees a firm in these industries could have and still be a small business.  The revisions primarily affect the eligibility for SBA’s financial assistance programs.  Nearly 4,000 more firms will become eligible for SBA’s loan programs under the revised size standards. 

SBA also retained the current 500-employee size standard for federal procurement of supplies under its non-manufacturer rule.  Wholesale Trade and Retail Trade NAICS codes and their size standards do not apply to procurement of supplies.  Therefore, the revisions do not affect the eligibility for contracting opportunities for small businesses.

The final rule can be viewed at www.regulations.gov, identified by the following RIN number: RIN 3245-AG49. 

In reviewing size standards, SBA takes into account the structural characteristics of individual industries, including average firm size, startup cost and entry barriers, the degree of competition, and small business share of federal government contracting dollars.  This ensures that small business size definitions reflect current economic conditions and federal marketplace in those industries.  Under the Jobs Act, SBA is required to review all size standards at least every five years. 

A White Paper entitled, “Size Standards Methodology,” which explains how SBA establishes, reviews, or modifies its receipts based and employee based small business size standards, can be viewed at http://www.sba.gov/size.

For more information about SBA’s revisions to its small business size standards for various industry sectors, click on “What’s New with Size Standards” on SBA’s Web site at http://www.sba.gov/size