The Small Business Association wants to redefine the qualifications of what makes a small business. The redefinition could stand to bring about 9,450 new companies under the small business umbrella. The change in status from mid-size to small would mean a windfall in access to federal programs and benefits companies were previously not qualified for.
The proposed changes are directed at 35 industries and one sub-industry classified as professional, scientific and technical and other services. Law, accounting, IT, architectural and engineering firms would be affected by the proposed new caps.
Previously, a company typically qualified as a small business if annual revenue fell below $7 million and hired fewer than 100 employees for a wholesale trade company and 500 employees for a retail trade company.
Passage of the amendments would raise the ceilings on both revenue and number of employees. Ceilings would be determined according to industry. According to figures from The Washington Post, an environmental consulting company would qualify as a small business if revenue fell below $14 million; an increase of $7 million. An IT firm, however, would only see a cap increase from $25 million to $25.5 million.
The SBA redefinition would reinforce the federal government’s initiative to increase contracts awarded to small, women- and veteran-owned businesses. The association is accepting comments regarding the proposed changes for two months. At that time, it will review comments and make a decision on implementing the new regulations.