Jessica Abrahams Discusses SBA’s Newly Proposed Business Size Standards in Washington Business Journal

Government and regulatory partner Jessica Abrahams discussed the Small Business Administration’s (SBA) newly proposed size standards in an article for the Washington Business Journal.

The article explained that the potential changes would overhaul how the SBA defines small businesses, which can alter which businesses can access its loan and grant programs. The changes include reducing the number of industry codes under which small businesses are categorized and increasing the size of businesses that can qualify. Under the changes, 114,541 companies would become eligible for federal small business benefits. The article noted that the SBA’s changes are intended to simplify how small businesses are classified, and to expand the amount eligible for support.

Abrahams said the proposed changes are being portrayed as positive and more inclusive because they allow some businesses to remain “small” longer and ease competition with larger entities. However, she said the proposed rule could disadvantage the very small businesses that the Small Business Act — which created the SBA — was designed to protect because it would allow larger, well-resourced businesses to qualify as "small" businesses and potentially out-compete smaller ones.

“Thus, over time, there will likely be a shift such that many businesses considered small under the current size standards will cease to exist as viable entities,” Abrahams said.