The U.S. Small Business Administration has been highly active in the years following the recession, as the federal government continues to try to stimulate the economy through the nation’s smaller firms. While several temporary programs are approaching expiration – such as the 504 loan program refinancing option – others continue to expand.
The size standards, listed in the Federal Register and North American Industry Classification System (NAICS), have been widely spoken about this month, as the SBA has proposed several changes in a variety of industries. These changes have all been to expand the size standards, allowing larger companies to apply for loan programs.
The question would be, what does this mean to your business?
SBA increases standards in three sectors
The SBA announced this week that three sectors in the NAICS – Real Estate and Rental and Leasing; Educational Services; and Health Care and Social Assistance – will have increased size standards effective October 24. All in all, the SBA forecasts this to allow roughly 19,500 additional firms and 58 industries to acquire SBA loans.
In the Health Care and Social Assistance Sector, 4,100 new firms will qualify for small business lending through the agency, spanning from nearly 30 industries. Further, 21 industries and 13,000 firms from the Real Estate and Rental and Leasing Sector will be eligible for SBA loans and assistance because of the increased standards.
Finally, the Educational Services Sector will now have 1,500 businesses from nine industries eligible for SBA lending that were not before the size increases.
These changes have been occurring on a rolling basis, and the SBA notes it takes public comments into account for the proposal of changes and the final approval process.
Why adjust size standards?
Some might view this as a strange move, as the pot of available funds borrowers have to acquire loans from seems to be dwindling rapidly. However, the SBA and small business advocates have been pushing for more funding, and in many ways look as though they will succeed in the fight.
The Business Journals Washington Bureau reported last week that the House passed a $1.05 trillion funding bill – which still needs to pass through the Senate and the White House – that includes a roughly $133 million increase in the amount of subsidies the SBA must disburse. This would also allow the SBA to continue on its torrid track of lending, as it has thus far backed just under $14 billion in 7(a) loans this fiscal year.
In short, the SBA is working to enlarge its size and scope to ensure that businesses which might be right on the cusp of size standards – a precarious position when trying to find loans – do not get left behind.
How to get SBA loans
BoeFly is one firm that can help small business owners acquire the SBA loans they need through a more efficient and effective loan application process. With thousands of lenders and a proven system of algorithms, borrowers can get a better chance at approval for SBA loans through BoeFly.