Pharos-Tribune

Breaking News

Community News Network

June 17, 2014

How 8,500 large companies will become small businesses overnight

When the clock strikes midnight on Sunday, July 13, thousands of relatively large companies will — poof — suddenly become small businesses.

It's not magic. It's just the federal government at work.

The Small Business Administration has announced plans to update the size standards used to determine which firms are eligible for the federal government's small-business lending and contracting programs. Coming on the heels of series of tweaks to individual industries over the past few years, this will be the first broad update based on inflation the department has made since 2008.

In some industries, the cutoff is measured in total number of employees. In others, it is measured in terms of a company's total assets or annual revenue. In this case, the updates will apply to nearly 500 sectors for which sales or assets are the standard.

Under the new caps, which take effect July 14, the agency estimates that roughly 8,500 additional companies will be considered a small business by the federal government.

Others might not consider them that way.

For example, after the update, a travel agency or a locksmith would qualify as small if they have annual revenues of less than $20.5 million, up from $19 million. A family clothing store or software publisher, meanwhile, could soon bring in up to $38.5 million a year and still apply for small business support.

This sweeping update comes after the agency has made a number of smaller changes to various sectors; namely those for which the department instead uses employee count to determine eligibility. As a result, certain sectors, like telecommunications and air travel, now have a small-business threshold of 1,500 workers.

In a recent column, Chuck Blakerman, an author and entrepreneur, called those size limits "absurd" and described the past five years as "the largest expansion of the definition of 'small' in the 61-year history of the SBA."

"Their small isn't our small," he added.

Members of Congress have taken similar issue with the agency's perceived expansion of the type and size of business the agency supports. In multiple hearings before the House Small Business Committee, the agency has been criticized for what some lawmakers worry is a shift away from helping mom-and-pop businesses to instead support mid-sized firms.

But the agency hasn't backed down, insisting, in part, that companies in certain sectors have to compete with multibillion-dollar corporations. In that case, a company with merely tens of millions of dollars in sales warrants small-business support.

In addition, SBA officials argue in the text of the rule that the changes will allow some firms that have lost access to contract set-asides or loan programs due to inflation to regain their status. Others that are about to eclipse the limit for their industry will also be able continue taking advantage of those programs.

Moreover, the agency added, "federal agencies will have a larger pool of small businesses from which to draw for their small business procurement programs." Heightened competition, they say, will help drive down prices and lead to a better return for taxpayers.

1
Text Only | Photo Reprints
Community News Network
  • Does Twitter need a censor?

    Twitter decided last year to make images more prominent on its site. Now, the social network is finding itself caught between being an open forum and patrolling for inappropriate content.

    August 21, 2014

  • sleepchart.jpg America’s sleep-deprived cities

    Americans might run on sleep, but those living in the country's largest cities don't appear to run on much.

    August 20, 2014 1 Photo

  • Who should pay for your kids ACT?

    Thirteen states paid for 11th-grade students in all public high schools to take the ACT college admission test this year, with several more planning to join them in 2015.

    August 20, 2014

  • Pets.jpg Why do people look like their pets?

    As much as we might quibble over the virtues and vices of Canis domesticus, however, and over whether human nature is any better or worse than dog nature, even dog fanciers don't usually want to look like a dog.

    August 20, 2014 1 Photo

  • Ice bucket challenge trending up

    Internet trends are a dime a dozen these days. Everything from Tebowing to planking to the cinnamon challenge can cause a wave of social media activity that can last for weeks before fizzling out.

    August 19, 2014

  • Africa goes medieval in its fight against Ebola

    As the Ebola epidemic claims new victims at an ever-increasing rate, African governments in Sierra Leone, Guinea and Liberia have instituted a "cordon sanitaire," deploying troops to forcibly isolate the inhabitants in an area containing most of the cases.

    August 18, 2014

  • Democrat? Republican? There's an app for that

    If you're a Republican, you might want to think twice before buying Lipton Iced Tea, and forget about Starbucks coffee. If you're a Democrat, put down that Reese's Peanut Butter Cup, and throw away the cylinder of Quaker Oats in your pantry.

    August 18, 2014

  • Five myths about presidential vacations

    In the nuclear age, presidents may have only minutes to make a decision that could affect the entire world. They don't so much leave the White House as they take a miniature version of it with them wherever they go.

    August 15, 2014

  • Can 6 seconds launch a career? A generation of Vine stars sure hopes so.

    A year ago, Shawn Mendes filmed himself singing a tentative acoustic cover of the Justin Bieber song "As Long as You Love Me" and put the results on Vine. He wasn't expecting much response. "I didn't really want anything to happen; I just kind of wanted to see what people would think," says Mendes, 16. "I posted that first Vine and woke up the next morning with 10,000 followers. That was pretty cool."

    August 14, 2014

  • Freshman.jpg 8 crucial tips for college freshmen

    With school starting back up around the country, no one has a bigger deer-in-the-headlights look than college freshmen.

    August 14, 2014 1 Photo

Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Poll

Does Indiana need a statewide water management plan and an administrator to implement it?

Yes
No
Unsure
     View Results
Featured Ads
AP Video
Raw: Grief After Deadly Airstrikes in Gaza Officer Who Pointed Gun at Protesters Suspended Kathy Griffin Challenges Minaj to 'a Booty Off' Johnson: Six Arrests, No Tear Gas in Ferguson Raw: Rescue, Relief Efforts at Japan Landslide Cadavers, a Teen, and a Medical School Dream Raw: Woman Escorted From Ferguson Protests California Drought Stings Honeybees, Beekeepers Officer Who Pointed Gun at Protesters Suspended Holder Hopes to Bring Calm to Ferguson US Mission to Rescue Hostages in Syria Failed Manfred, Torre and MLB Take Ice Bucket Challenge Bank of America Reaches Record $17B Settlement Holder Reassures Ferguson Community With Visit GlobalPost CEO Remembers Foley As a Brave Man
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.