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By Benetrends • May 1, 2015

SBA Changes Definition Of Small Business

Starting July 14, the Small Business Administration’s (SBA) new size standards will go into effect. It will  expanding the number of companies defined as a small business by approximately 8,500, according to The Washington Post, and making them eligible for SBA financing.

The changes adjust for inflation - the first such adjustment since 2008 - and vary by industry, with some being considered small businesses based on total assets or revenue and others on the number of employees.

Fortunately for franchisees, the new standards will not make SBA loans more competitive for them. For example, limited-service restaurants can have up to $11 million in revenue, up from $10 million, and still qualify for SBA support. This only marginally increases the number of franchise groups operating limited-service restaurants that will now be considered small businesses.

Learn more about the new size standards at sba.gov. And for questions about your individual eligibility for SBA financing, talk with a lending expert.

*Source: Board of Governors of the Federal Reserve System, “Financial Accounts of the United States: Flow of Funds, Balance Sheets and Integrated Macroeconomic Accounts.” Fourth Quarter 2013.