SBA proposes major overhaul of small business size standards

The U.S. Small Business Administration (SBA) has proposed a major restructuring of federal small business size standards, aiming to broaden the pool of companies qualifying for contracting, lending, and counseling support. The proposal would collapse approximately 995 existing standards across various North American Industry Classification System (NAICS) industries into 338 standards.

Key changes include significantly raising revenue thresholds for certain sectors. For instance, computer systems design services could see a threshold increase from $34 million to $531 million. The SBA also proposes moving toward employee-based measurements in certain cases to prevent firms from fluctuating between small and large classifications due to revenue volatility. The agency estimates these changes would newly classify approximately 114,541 businesses as small.

The proposal has drawn significant attention, with over 66,000 comments submitted via the Federal Register. Many critics argue that the new standards would force small businesses to compete directly against mid-sized firms. The public comment period is scheduled to close on September 21, 2026.